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Confidence in PropTech Wavers as Markets Wind Down

MetaProp’s Mid-Year 2022 Global PropTech Confidence Index just dropped some sobering statistics on investor confidence for the sector. With factors like staggeringly high inflation rates, SPAC collapses, rising interest rates, and a brewing recession all bubbling in the background, investor confidence in PropTech has stooped to its lowest levels on record.

Key highlights of the report include a 3.5-point dip in investor confidence from six months prior, when investor confidence was at its peak. The current Investor Confidence Index sits at 5.8 out of 10. Additionally, the Mid-Year 2022 Global PropTech Startup Confidence Index is also experiencing its lowest levels to date, with a rating of 4.2 out of 10. Again, investor confidence had been at its highest just a short time ago; last year’s rating was 8.3 out of 10. 

It’s important to note that throughout this year, the early-stage market started to tighten as investors adjusted their expectations to match the forecast of a total market downturn. This has manifested as tighter control over value, a preference for longer cash runways from companies, and a slowdown in deal activity. Although market conditions are more favorable for investors, venture market transaction activity has remained muted relative to its recent record pace, though still robust compared to longer-term averages. When macroeconomic woes steady, or when inflation finally gets under control and interest rates ease, there’s plenty of reason to believe that overall enthusiasm for PropTech investments will bounce back.

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