Digital property: Proptech startups are gearing up to ride the AI wave

The Covid-19 pandemic was a pivotal moment for proptech startups, accelerating technology adoption across the real estate industry. Already ahead in tech integration, these companies quickly capitalised on the growing demand for innovative solutions, and now they’re leveraging artificial intelligence (AI) to further disrupt the sector.
 

From property listings and transactions, to their management, and development, proptech startups are now present in various aspects of the realty sector.
 

“The Covid-19 pandemic and subsequent lockdowns acted as catalysts, accelerating technology adoption across the real estate industry,” says Dhruv Agarwala, group chief executive officer at Housing.com and PropTiger.com.
 

According to Agarwala, since 2009, cumulative investments in the proptech sector have surpassed $4 billion. Industry estimates show that the Indian proptech market is expected to grow at a rate of 9.6 per cent from 2021 to 2025, potentially reaching the size of $100 billion by 2030.
 

Globally, the proptech market size is projected to grow at a compounded annual growth rate of 11.9 per cent, from $33.57 billion in 2023 to $89.93 billion by 2032.
 

This interest has also led to the emergence of various real estate accelerator programmes and funds. 
 

Recently, Spyre VC, said to be India’s first proptech-focused fund, drew seven anchor investors, including Prestige and Ajmera Realty. This fund, with a maiden fundraising target of Rs 400 crore, is backed by Venture Catalysts and the Confederation of Real Estate Developers’ Associations of India.
 

Several proptech startups have announced large investment plans to expand their businesses. One such firm, Square Yards, is planning an initial public offering in 2026.
 

Vivek Agarwal, co-founder and chief technology officer, Square Yards, tells Business Standard that the “digital migration compelled real estate companies to embrace technology or risk losing customers, consequently fostering the emergence of numerous proptech startups as acceptance of their solutions soared within the industry”.
 

Across the board, conversations about proptech are becoming more frequent, and it is now attracting both top-flight venture capitalists and talented entrepreneurs, he adds.
 

Samudragupta Talukdar, founder and chief executive officer of Relata, another proptech startup, adds, “Proptech’s growth has been substantial, with a significant surge in the number of entrepreneurs transitioning from service-based businesses to proptech, driven by the potential for higher valuations and scalability.”
 

Eyes on AI
 

After the emergence of AI, conventional companies have also started offering tech solutions. However, proptech companies, which have been using digital tools from the onset, say they have an edge over them, and that AI is only helping them move ahead faster.
 

For example, Relata has developed a product called Reiya, which automatically disseminates information about properties, localities, pricing, construction updates and so on to buyers, brokers, and newly onboarded sales teams. It also offers a predictive AI product called Arca, which offers insights into system health and performance metrics.
 

“Users can ask Arca for information on sales performance, top leads, regional focus, target age groups, high-performing channel partners, and the length of the sales cycle,” says Talukdar.
 

In October last year, proptech unicorn NoBroker announced the launch of CallZen.Ai, its conversational AI platform. The software records every conversation of the relationship managers and uses AI to transcribe it. It was developed primarily to increase efficiency and reduce mistakes by relationship managers.
 

Housing.com has started providing virtual tours of the listings on its platform using AI.
 

“Gone are the days of endless scrolling through listings. With just a tap, users can access answers to complex queries, like finding the ideal neighbourhood based on commute time or school proximity,” says Agarwala. “Our apps are moving beyond mere listings; they’re evolving into information hubs, offering insights into various aspects of communities, from schools to shopping centres.”
 

Square Yards also says that it has been using AI for virtual interior staging and visualisation, content generation, and building large-scale digital twins of cities. The results have been promising.
 

“The integration of AI-driven solutions has yielded impressive results — a remarkable 50 per cent surge in user engagement and a significant 40 per cent increase in user conversion rates,” says Agarwal.
 

Outlook bullish
 

The Indian real estate sector is predicted to reach $1 trillion in market size by 2030, up from $200 billion in 2021. By 2025, it is likely to contribute 13 per cent to the country’s total gross domestic product.
 

According to Talukdar, proptech startups are “well-positioned” to tap into this market, leveraging the ongoing digital revolution, increasing smartphone penetration, and the rising demand for housing.
 

Square Yards’ Agarwal adds that this sector is “only just beginning to explore its full potential.” 

He says, “It is conceivable that India will witness the emergence of numerous billion-dollar companies operating within the real estate and proptech spheres.”
 

The young, emerging proptech industry is starting to click.