How AI is helping proptech overtake fintech investment and green the Built World

AI-enabled Built World startups raised as much as FinTech in 2022, showing investor interest in using machine learning and computer vision to make building construction, management and transactions smarter and more efficient.
How AI is helping proptech overtake fintech investment and green the Built World

This week a new report was published by sustainable proptech VC investor A/O PropTech exploring the use of AI technology in the built environment.

The report is a deep dive into the "Built World" – human-made buildings, physical structures (like buildings) that make up our cities, towns, and communities. 

It demonstrates how AI-embedded tech is providing the building blocks for the future of proptech.

AI is inherent in everything from robotics used in construction to IoT, digital twins, computer vision, and generative AI. It creates smart buildings and infrastructure and facilitates real estate investment.

More VC investment in Built World AI than Fintech AI 

Over the past five years, 25% of Built World venture deals were in businesses leveraging AI. Comparatively, just 15% of venture-backed FinTech startups across the same time period leveraged any form of artificial intelligence. 

Early Stage Venture Deals Dominate

The past five years have seen the gradual maturation of AI startups in the Built World. Series A+ deals have grown from around 20% of deal flow to represent 50%.

Meanwhile, Seed stage activity has remained broadly consistent, indicating further growth ahead.

Sustainability goals underscore investments in Built World AI

Venture deal volume in 2022 was concentrated on real estate transactions, smart building, and construction startups. 

For example, in Germany, syte received seed funding for its real estate search engine for brokers, urban planners, and project developers. 

Also funded was Predium which uses AI to help companies with their ESG with a platform that provides data on buildings, consumption, CO2 emissions, tenants, and climate risks.

And the trend is continuing in 2023.

Carbonaide sustainable bricks and concrete
Carbonaide greening concrete

This year we've seen investments in greening up construction with  Carbonaide and Concretene.

Also receiving funding this year is Oculai, which uses AI to gain greater insights into building sites (critical to reducing environmental inefficiencies), and Neverwaste (formerly called Unwasted)who turns waste cardboard and packaging into panel boards for use in construction, furniture, kitchens, and flooring.

The start of generative AI's impact

The report predicts Generative AI as having a pivot impact in real estate, optimising building design through architectural concept design model creation and rendering and even generating a Building Information Model (BIM) from a simple descriptive text.

Already there's Planner 5D for interior design. leverages generative models to create a digital twin of the earth. Satellite Vu plans to collect the data that fills the gap between high-fidelity drone or street-level data and general large-scale satellite mapping data.

Gregory Dewerpe, founder and CIO of A/O PropTech advises a thoughtful analysis beyond the hype, noting that 

"it is important to look at innovation in a holistic manner, and while AI has massive potential, it will require the entire tech stack of the Built World to progress forward (data, transparency, automation) to yield game-changing impact.

 That's precisely why we are tackling this generational industry transition, the largest of our generation, through a whole array of technologies, which directly and indirectly contribute to a better Built World. 

Broadening digitisation will enable innovators to leverage generative models and other AI technologies to unlock true automation in the Built World - which can be essential for decarbonising our buildings and cities."

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