2023 PropTech
Year in Review
February 2024
2
01
EXECUTIVE SUMMARY
2
02
KEY SUBSECTOR MARKET TRENDS
13
03
PROPTECH MARKET SUMMARY
31
04
PUBLIC MARKETS
35
05
HOULIHAN LOKEY OVERVIEW
38
06
APPENDIX
48
$4,226
$4,833
$6,964
$6,119
$14,507
$9,407
$4,211
$250
$475
$2,060
$1,345
$4,305
$2,901
$510
$4,477
$5,308
$9,024
$7,464
$18,812
$12,308
$4,721
2017 2018 2019 2020 2021 2022 2023
PropTech 2023—A Challenging Year With Optimism Ahead
3
• Against the backdrop of macroeconomic uncertainty, increasing interest rates, and a tightening residential real estate market, 2023 saw more
than $4.7 billion in growth equity and debt investments into U.S. PropTech companies.
– PropTech remains a very diverse market
. Some end markets have been more affected by the macro environment (e.g., mortgage, office), but
there is still a large opportunity driven by increasing technology adoption among real estate investors and property managers looking
to streamline operations and increase efficiency.
• ~50 capital raises were north of $20 million in 2023 as scale leaders continue to emerge across all categories of PropTech.
– Multiple $50+ million capital raises in construction tech, multi-family, and CRE technology (Avenue One, Kasa Living, Mighty Buildings)
highlight the TAM opportunity and attractiveness of certain end markets.
– Throughout the year, investors increasingly prioritized growth, profitability, and revenue stability.
While PropTech experienced a significant market pullback in 2023, the market opportunity remains large and attractive for
category leaders.
U.S. PropTech Private Growth Capital Investment—Trailing Seven Years
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
Debt Raise ValueEquity Raise Value
Average U.S. PropTech Growth Investment/Year (2017–2023)
$8,873
Seven-Year
Average
(62%) YoY
($M)
Alignment of Multiple Factors Drove 2023 Headwinds
4
U.S. Office Vacancy Increasing as Return to Office Stalls
Landmark NAR Class-Action Decision Threatens Agent Commissions, Creating Uncertainty for Residential Sector
Inflation Down From 2022 High but Remains Above FOMC Longer-Run Target Rate
An aggressive rate tightening cycle, increased office vacancy rate, and the ongoing NAR lawsuit all negatively impacted the
2023 PropTech market.
U.S. Office Vacancy Rate
(3)
Kastle Back to Work Barometer
(4)
(1) Bureau of Labor Statistics.
(2) Federal Reserve.
(3) Cushman & Wakefield, “U.S. Office MarketBeat Q3 2023.”
(4) Kastle Systems Back to Work Barometer. Reflects swipes of Kastle
access controls from the top 10 cities, averaged weekly.
(5) Redfin, 10/31/2023.
(6) National Association of Realtors (NAR), 9/6/2023.
16%
17%
17%
17%
17%
17%
17%
18%
18%
19%
19%
23%
29%
33%
36%
35%
43%
44%
45%
48%
49%
48%
Q1-21 Q3-21 Q1-22 Q3-22 Q1-23 Q3-23
YoY inflation
declined to 3.4% in
Dec-23, down from
the high of 9.1% in
Jun-22.
(1)
U.S. office utilization
has stagnated at
~50% of workdays as
companies settle into
hybrid work plans.
(4)
Traditional brokers will undoubtedly now train their agents to welcome
conversations about fees…it’s also possible that buyers will become the ones
who decide how much to pay a buyer’s agent…many buyers will still hire a
buyer’s agent, but at a fee they negotiate.
– Glenn Kelman | CEO, Redfin
(5)
The U.S. model of independent, local broker marketplaces is widely considered
the best value and most efficient model in the world, with no hidden or extra
costs and with more complete, verified information compared to other countries,
We look forward to arguing our case in court.
– Mantill Williams | VP PR & Communication Strategy, NAR
(6)
While NAR plans to appeal the decision, the potential decoupling of buyer and seller commissions could put downward pressure on commission rates.
1
2
3
One-Year CPI Change
(1)
FOMC Longer Run Target Rate
(2)
2.0%
3.4%
0.0%
5.0%
10.0%
Dec-18 Oct-19 Aug-20 Jun-21 Apr-22 Feb-23 Dec-23
PropTech Is Not Alone: Challenging Conditions Impacted Private Markets Broadly
in 2023
5
• Software M&A volumes were impacted by the market uncertainty in 2023, with U.S. software M&A deal volume down ~33% YoY, a significant
decline when compared to U.S. PropTech M&A deal volume only being down ~5% YoY.
– Continued “flight-to-quality” in M&A and growth investing; investors are willing to pay more for companies with market-leading KPIs.
• Challenging market conditions heavily impacted growth capital investing in 2023, with U.S. software growth equity investment declining
~33% YoY to ~$67 billion, versus a ~62% YoY decline for U.S. PropTech.
Broad private market tech slowdown as macroeconomic and geopolitical headwinds persist.
U.S. Annual Software Growth Capital Deal Value
(2)
Software growth capital also declined in 2023 compared to the previous
two years.
1,628
1,492
1,401
2,263
1,760
1,188
2018 2019 2020 2021 2022 2023
2023 was a slow year for software M&A activity, especially when viewed
against 2021 and 2022.
U.S. Annual Software M&A Deal Volume
(1)
$54.0
$55.3
$70.4
$164.9
$99.5
$66.7
2018 2019 2020 2021 2022 2023
Sources: S&P Capital IQ as of 12/31/2023, PitchBook.
(1) Total deal volume reflects count of M&A/buyout transactions of U.S. headquartered software target companies.
(2) Total deal value is represented in billions and inclusive of both equity and debt raises. Includes all VC stages and growth/expansion investments of U.S. headquartered software target companies.
($B)
(33%) YoY
(33%) YoY
Drivers of Optimism in PropTech for 2024
6
Federal Funds Rate Implied by Futures Market for Next 12 Months
(4)
Strong 2023 Public Market Performance Provides Healthy Valuation Environment for M&A Activity
Investors Expecting Rate Cuts in 2024
Investors Face Increased Pressure to Deploy Capital as Global PE Dry Powder Reaches Record Levels
Substantial private equity dry powder, stronger public company performance, and expectations for future interest rate cuts
offer optimism for a stronger 2024.
Source: S&P Capital IQ as of 12/31/2023.
(1) PitchBook (12/4/23), “Q3 2023 Global Private Market Fundraising Report.” Dry powder as of 3/31/2023.
(2) Includes companies in the PropTech Index shown on page 36; latest available cash balance as of 12/31/2023.
(3) PropTech Index includes all companies shown on page 36 and is weighted on a market-capitalization basis.
(4) CME FedWatch Tool, represents expected value based on mid-point of fed fund rate range as of 2/2/2024.
38%
24%
43%
PropTech Index
(3)
S&P 500 NASDAQ
($B)
$1,063
$1,194
$1,310
$1,484
$1,460
$1,501
$1,546
2017 2018 2019 2020 2021 2022 2023
(1)
Dry powder accumulating
within PE Universe, but
fund dynamics create
increased pressure for
capital deployment in
2024.
Public strategic
PropTech companies
have $73 billion in cash
on their balance sheets
and are well positioned to
drive consolidation.
(2)
Investors anticipate rate
cuts in 2024, increasing
incentive for investors
and acquirers to deploy
dry powder/ cash
reserves.
1
2
3
5.3%
5.2%
4.9%
4.7%
4.5%
4.2%
4.1%
Mar-24 May-24 Jun-24 Jul-24 Sep-24 Nov-24 Dec-24
+24%
2023
PropTech Financing Market—1H vs. 2H 2023
7
2023 Monthly PropTech Growth Investment vs. S&P 500 Index
Sources: PitchBook, CB Insights, S&P Capital IQ as of 12/31/2023, company filings, company websites, press releases.
($M)
Equity and Debt Raise Value
S&P 500 Index
PropTech investment activity slowed throughout 2023 as many investors exercised caution and many companies focused on
extending runway from prior funding rounds by cutting costs.
1H 2023 PropTech Equity and Debt Investment: ~$2.8B 2H 2023 PropTech Equity and Debt Investment: ~$1.9B
• Following several years of record investment activity, 2023 saw a fundamental shift in the growth capital fundraising market, both for PropTech
and tech more broadly, as investors increasingly focused on responsible growth, revenue visibility, and profitability.
$228
$511
$519
$515
$692
$306
$202
$297
$425
$544
$271
$210
Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23
On Average, Smaller Investment Sizes With More Meaningful Slowdown in Larger
Growth Rounds
Commercial/Multi-Family Increased Its Share of PropTech Equity Investment by Category
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
Average U.S. PropTech Investment Deal Size ($M) Count of $20M+ U.S. PropTech Investments
(48%)
YoY
8
Average investment size stabilized in 2H 2023 but remained below 2022 levels, reflecting a continued focus on funding
capital-efficient businesses.
Residential
52%
Construction
13%
CRE/Multi-Family
35%
Residential
40%
Construction
23%
CRE/Multi-Family
37%
2021 2022 2023
• Investors continue to shift capital away from residential in favor of commercial and multi-family, highlighted by rounds raised by market
leaders—including MaintainX, HALIO, and Verkada—in 2H 2023.
Commercial/multi-family
has grown into the category
leader for PropTech in 2023.
The residential vertical
garnered the majority of
PropTech investment in the
near-zero-rate environment.
(45%)
YoY
32
30
74
90
87
44
28
23
1H-20 2H-20 1H-21 2H-21 1H-22 2H-22 1H-23 2H-23
$37.9
$20.9
$41.5
$48.9
$36.3
$30.5
$19.5
$16.8
1H-20 2H-20 1H-21 2H-21 1H-22 2H-22 1H-23 2H-23
Residential
33%
Construction
28%
CRE/Multi-Family
39%
PropTech M&A Market Remained Active With Continued Consolidation Despite
Market Pressure
9
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
(1) Deal values represent enterprise values.
(2) Includes $400 million cash consideration and up to $100 million potential earnout over three years.
Strategic acquirers drove ~90% of overall activity in PropTech M&A.
• Expanding number of large strategics and PE-backed platforms (e.g., Zillow, GreenStreet, etc.) will continue to drive M&A activity in 2024.
U.S. PropTech M&A Transactions—Trailing Six Years Significant 2023 M&A Transactions
(1)
• The market continued to show a “flight to quality” in 2023, shifting toward enterprise-oriented solutions with a demonstrated track record of
profitability. Going forward, we expect that:
– The market will increasingly value businesses that have used capital efficiently to build a strong profitability and growth profile.
– Financial sponsors will face increasing pressure to deploy dry powder, but the focus will remain on reserving premium multiples for top-quality
assets with differentiated growth, retention, and cash flow metrics.
– The PropTech market will continue to rebound as investors adjust to higher interest rates and the overall technology landscape continues to
see returns in the public market.
$500M
(2)
/
$700M
/
UndisclosedUndisclosed
/ //
Undisclosed
104 104
103
162
99
94
2018 2019 2020 2021 2022 2023
Strong PropTech Public Market Performance Fueled by Broader Tech Rebound
10
PropTech stocks outperformed in 2023, with high-quality, “profitable growth” companies continuing to trade at premium
valuations.
2023 Public Market Performance
PropTech Index
(1)
S&P 500 NASDAQ
38%
24%
43%
• Houlihan Lokey’s PropTech Index outperformed the S&P 500 in
the 2023, with multiple constituents seeing 100%+ share price
increases.
2024E EV/Revenue vs. “Rule of 40” Components
(3)(4)
CY24E EBITDA Margin
<25% 25%+
CY24E
Revenue
Growth
<15% 2.0x 8.3x
15%+ 4.6x 13.3x
Top 10 2023 PropTech Performers
(2)(3)
286% 143% 113%116%
Source: S&P Capital IQ as of 12/31/2023.
(1) PropTech Index includes all companies shown on page 36 and is weighted on a market-capitalization basis.
(2) Individual companies’ performances are based on stock price performance as of 12/31/2023.
(3) Includes all companies shown on page 36, excluding negative Rule of 40 companies.
(4) Reflects metrics based on CY24E revenue, EBITDA, and revenue growth.
• Investors are increasingly valuing companies that balance revenue
growth and profitability and no longer rewarding “growth at all
costs.”
Public Market Performance Driven by Combination of Growth
and Profitability
2024E EV/Revenue vs. “Rule of 40”
(3)(4)
R² = 0.67
0.0x
10.0x
20.0x
0.0% 20.0% 40.0% 60.0% 80.0%
107%
94% 82% 77%80% 76%
Leading Global PropTech Coverage Team
U.S. PropTech Team
Chris Gough
Managing Director
+1 415.273.3696
Chris.Gough@HL.com
Rip Furniss
Senior Vice President
+1 646.259.7483
Pat Hagerty
Vice President
+1 646.259.7528
Tombstones included herein represent transactions closed from 2019 forward.
*Selected transactions were executed by Houlihan Lokey professionals while at other firms acquired by Houlihan Lokey or by professionals from a Houlihan Lokey joint venture company.
has been acquired by
Sellside Advisor*
has been acquired by
a portfolio company of
Sellside Advisor*
has been acquired by
Sellside Advisor*
has received an investment from
Financing Advisor*
has been acquired by
Sellside Advisor*
has received a majority investment
from
Sellside Advisor*
has been acquired by
Sellside Advisor
has been acquired by
Sellside Advisor*
has been acquired by
Sellside Advisor
has received a strategic growth
investment from
Sellside Advisor
a portfolio company of
has been acquired by
Sellside Advisor
has been acquired by
Sellside Advisor
a portfolio company of
has been acquired by
Sellside Advisor*
has been acquired by
MLS Technology Holdings, LLC
Sellside Advisor*
has been acquired by
Sellside Advisor*
has received a strategic investment
from
Sellside Advisor*
has acquired
Buyside Advisor*
has received a majority
recapitalization from
Sellside Advisor*
Leader in PropTech Advisory
has been acquired by
Sellside Advisor
has received funding from
Financial Advisor*
has acquired
a portfolio company of
Buyside Advisor
11
has acquired
Buyside Advisor
a portfolio company of
has agreed to be acquired by
Sellside Advisor
Transaction Pending
a portfolio company of
has been acquired by
Sellside
Advisor
Sascha Pfeiffer
Managing Director
+44 (0) 69 204 34 6415
Sascha.Pfeiffer@HL.com
Dominic Orsini
Managing Director
+44 (0) 161 240 6447
Mark Fisher
Managing Director
+44 (0) 20 7907 4203
Kevin Walsh
Managing Director
+1 415.273.3664
Global Coverage
Raymond Fröjd
Managing Director
+46 (0) 70 747 25 17
Global Team Built to Advise the Converging Software, FinTech, and Financial
Services Markets
12
Houlihan Lokey Software Leadership Team
Financial Services FinTech
Jeff Levine
Global Head of
Financial Services
Mike McMahon
Managing Director
Asset Management
David Villa
Managing Director
Specialty Finance
Brent Ferrin
Managing Director
Specialty Finance
James Page
Managing Director
Mortgage
Juan Guzman
Managing Director
Insurance
Arik Rashkes
Managing Director
Insurance
Craig Tessimond
Managing Director
Insurance
Gagan Sawhney
Managing Director
Capital Markets
Jennifer Fuller
Managing Director
Mortgage
Mark Fisher
Managing Director
Tim Shortland
Managing Director
Chris Pedone
Managing Director
Paul Tracey
Managing Director
Christian Kent
Managing Director
Kartik Sudeep
Managing Director
Alec Ellison
Global Head of
FinTech
Tobias Schultheiss
Managing Director
Todd Carter
Chairman of Global Tech
Jason Hill
Co-Head of U.S.
Technology
John Lambros
Co-Head of U.S.
Technology
John.Lambros@HL.com
Chris Gough
Managing Director
Shane Kaiser
Managing Director
SKaise[email protected]
Vikram Pandit
Managing Director
VPandit@HL.com
Sascha Pfeiffer
Head of European
Technology
Sascha.Pfeiffer@HL.com
Phil Adams
Global Head of Tech
Phil.Adams@HL.com
Kevin Walsh
Managing Director
Joshua Wepman
Managing Director
James Craven
Managing Director
James.C[email protected]
Raymond Frojd
Managing Director
Raymond.Frojd@HL.com
Dominic Orsini
Managing Director
Dominic.Orsini@HL.com
Adrian Reed
Managing Director
Additional Senior Officers With End-Market and Business-Model Expertise
13
01
EXECUTIVE SUMMARY
02
KEY SUBSECTOR MARKET TRENDS
03
PROPTECH MARKET SUMMARY
04
PUBLIC MARKETS
05
HOULIHAN LOKEY OVERVIEW
06
APPENDIX
2
13
31
35
38
48
Macroeconomic Trends Affecting the Real Estate Market
14
Continued Strength in the Labor Market; Unemployment Rate Near 20-Year Low
Mortgage Rates Have Begun to Decline; Projected to Keep Declining With News of Inflation Calming
Inflation Down From 2022 High but Remains Above Fed Target Rate
Cooling inflation, strong labor market, and declining mortgage rates suggest investors see path to a successful “soft landing”
in 2024.
Mortgage rates declined
for nine consecutive
weeks to end 2023 and
are forecasted to
decline to 6.1% by Q4
2024.
(5)
6.6%
5.0%
6.0%
7.0%
8.0%
Jan-23 Mar-23 May-23 Jul-23 Aug-23 Oct-23 Dec-23
(1) Reuters.
(2) Bureau of Labor Statistics.
(3) Federal Reserve.
(4) Freddie Mac.
(5) National Associate of Realtors (NAR). Reflects 30-year fixed rate
mortgage forecast for Q4 2024 as of 1/26/24.
30-Year Fixed Rate Mortgage Avg. as of 12/28/2023
(4)
While Fed is “within
striking distance” of
2% target, officials
expect to approach rate
cuts “methodically and
carefully.”
(1)
3.7%
157.2
120.0
145.0
170.0
0.0%
10.0%
20.0%
Dec-05 Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Dec-21 Dec-23
U.S. Unemployment Rate (%) Total U.S. Nonfarm Employment (M)
Labor market showing
continued resilience as
employment metrics
improve despite tight
monetary policy.
(4) (4)
+3% YoY
1
2
3
One-Year CPI Change
(2)
2.0%
3.4%
0.0%
5.0%
10.0%
Jan-21 Jun-21 Nov-21 Apr-22 Sep-22 Feb-23 Jul-23 Dec-23
FOMC Longer Run Target Rate
(3)
5.3M
5.1
4.9
5.3
5.5
5.5
5.3 5.3
5.6
6.1
5.1
4.1
4.3
4.6
4.2
'13A '14A '15A '16A '17A '18A '19A '20A '21A '22A '23A '24E '24E '24E
6.6%
5.0%
6.0%
7.0%
8.0%
Jan-23 Mar-23 May-23 Jul-23 Aug-23 Oct-23 Dec-23
Interest rates
reach 23 year high
of 7.8% in last
week of Oct-23
Key Subsegment Trends: Residential Real Estate
15
(1) Freddie Mac.
(2) Mortgage Bankers Association (MBA).
(3) National Association of Realtors (NAR).
(4) Fannie Mae.
Forecasts for 2024 expect an average of 6% YoY growth in existing
home sales.
MBA Forecast as of
1/19/2024
NAR Forecast as of
1/26/2024
Existing home sales saw continuous QoQ declines in 2023 but are
expected to return to positive growth in 2024.
Existing Home Sales (SAAR, M) and QoQ Growth
(2)
30-Year Fixed Rate Mortgage Avg. as of 12/28/2023
(1)
Existing Home Sales (M)
(2)(3)(4)
Average Historical Annual Transactions/Year (2013A–2023A)
1
Mortgage Rates Have Begun to Fall From the 2023
High With the Decline Expected to Continue
3
Residential Transactions Fell Throughout 2023,
Expected to Rebound in 2024
4
Existing Home Sales Expected to Rise in 2024 but
Remain Below Historical Average
Fannie Mae Forecast
as of 1/10/2024
2
The Level of Refinancing for Mortgage Origination
Expected to Increase in 2024
Total 1-to-4 Family Home Mortgage Originations ($B)
(2)
Difficult market conditions significantly impacted the residential real estate and mortgage markets in 2023, but home sales are
expected to rise in 2024 as mortgage rates are expected to continue to decline in line with rate cuts.
MBA Forecast as of
1/19/2024
4.3
4.3
4.0
3.9
4.0
4.2
4.4
4.6
3%
(2%)
(5%)
(4%)
4%
5%
5%
4%
Q1-23 Q2-23 Q3-23 Q4-23 Q1-24E Q2-24E Q3-24E Q4-24E
$267
$371
$363
$324
$304
$389
$432
$411
$66
$92
$81
$75
$86
$110
$135
$140
Q1-23 Q2-23 Q3-23 Q4-23 Q1-24E Q2-24E Q3-24E Q4-24E
Purchase Mortgage Originations Refinance Mortgage Originations
‘24E
Key Subsegment Trends: Residential Real Estate (cont.)
16
(1) Freddie Mac.
(2) CBRE Research, CBRE Econometric Advisors, Freddie Mac, U.S. Census Bureau, Realtor.com®, FHFA, Q3 2023.
New Home Purchase Cost Remains Substantially More Expensive Than Apartment Rents
Monthly Payment for a New Purchase vs. Monthly Rent
(2)
Housing Inventory in Existing Homes (M)
(1)
and Median Sales Price for Existing Homes ($K)
(1)
1
Home Prices Remain Elevated Despite Higher Rates as Inventory Remains Tight
Significant and Expanding Gap Between Rental and Home Purchase Cost
+52%
Higher monthly payment for
newly purchased home vs.
renting.
(2)
+79%
Increase in monthly payment
for a new home purchase since
Q3 2020.
(2)
+39%
Increase in median sales price
for existing home since
December 2019.
(1)
(28%)
Decrease in housing inventory
since December 2019.
(1)
2
$1,500
$2,000
$2,500
$3,000
$3,500
Q3-17 Q3-18 Q3-19 Q3-20 Q3-21 Q3-22 Q3-23
Monthly Payment for a New Purchase Monthly Rent
$383K
0.0
0.5
1.0
1.5
2.0
$0
$150
$300
$450
Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23
Existing Homes
Inventory (M)
Existing Homes
Median Sale Price ($K)
Housing Inventory in Homes for Sale (M)
Housing Inventory: Median Listing Price in US ($K)
Tight inventory conditions in residential market kept home prices elevated and pushed cost of ownership vs. renting gap
higher.
Key Subsegment Trends: Residential Real Estate Tech
17
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
Residential Real Estate (RRE) Tech Highlights Top 10 U.S. RRE Tech Equity Rounds of 2023
Date Company
Selected
Investor(s)
Equity
Invested
Equity
Funding to
Date
Latest
Reported
Valuation
3/6 $150 $574 $1,092
4/24 $100 $236 $700
2/7 $100 $176 $400
7/1 $38 $134 $410
10/11 $30 $37 $88
1/12 $29 $35 $200
8/25 $25 $25 $433
12/7 $22 $25 NA
1/31 $20 $23 NA
8/3 $19 $53 $209
($M)
Home Sustainability
• IOT/smart home solutions focused on
optimizing energy and water consumption,
monitoring air quality, and reducing carbon
footprint continue to attract interest from
sustainability-conscious investors.
• Slowdown in residential RE software
consolidation in 2023 as the market grappled
with declines in existing home sales, driven by
a challenging macroeconomic environment.
Activity Slowdown
• Residential real estate technology players
saw a wave of M&A activity in 2023 as the
sector continues to consolidate.
Significant RRE M&A
Key Players
Key Players
Key Transactions
/
/
/
/
1,008
850
900
950
1,000
1,050
Dec-22 Feb-23 Apr-23 Jun-23 Aug-23 Oct-23 Dec-23
278
280
327
377
LTM Q3-20 LTM Q3-21 LTM Q3-22 LTM Q3-23
Key Subsegment Trends: Multi-Family
18
1
Multi-Family Construction Levels Hit Record in July
U.S. Multi-Family Housing Units Under Construction (in Thousands)
(1)
Multi-family units under construction remained near an all-time
high in December 2023.
(1)
1.02M
Record multi-family housing
units under construction in July
2023.
(1)
+7.3%
Increase in multi-family housing
units under construction YoY in
December 2023.
(1)
+7% YoY
2
Multi-Family Completions Levels Continues Strength
U.S. Multi-Family Housing Units Completed (in Thousands)
(2)
Multi-family completions have experienced sustained growth in the
past four years.
115K
Multi-family completions in Q3
2023.
(2)
+15%
Increase in multi-family
completion YoY in LTM Q3
2023, the highest on record.
(2)
36% Increase
(1) U.S. Census Bureau.
(2) CBRE Research.
Multi-family construction and completion continues to bring new inventory online.
Key Subsegment Trends: Multi-Family (cont.)
19
2
3
Multi-Family Rent Growth Normalizes as Inflation
Subsides
4
Multi-Family Net Absorption Growth Signals Optimism
Multi-Family Rental Vacancy Rates Normalizes at 20-
Year Average
Multi-Family Vacancy Rate
(3)
20-Year Average Multi-Family Vacancy Rate
5.0%
1
Multi-Family Debt Maturity “Wall”
Multi-Family Loans Maturing: 2020 – 1H 2022 Originations ($B)
(1)(2)
$246 billion of multi-family loans originated in lower-rate
environment from 2020 to 1H 2022 will mature in the next three years.
(1)(2)
Vacancy rates have trended up over the past few quarters but have
normalized near the long-run average of 5%.
(3)
Multi-Family YoY Rent Growth
(2)
Multi-Family Net Absorption (Units in Ks)
(3)
(1) Newmark 2023 U.S. Multifamily Capital Markets Report.
(2) Globest.
(3) CBRE Research, CBRE Econometric Advisors.
$87
$96
$63
2023E 2024E 2025E
Stabilizing rents and vacancy rate normalization demonstrates a return to normal while upcoming debt maturities may put
pressure on multi-family owners and investors.
5.1%
0%
2%
4%
6%
Q3-18 Q3-19 Q3-20 Q3-21 Q3-22 Q3-23
Net absorption totaled 82K units in Q3 2023, a significant
improvement from the negative figure in 2022.
(3)
Multi-family rent growth rates are down significantly from the
record 15.2% YoY increase in Q1 2022.
(3)
0.7%
(10%)
0%
10%
20%
Q3-18 Q3-19 Q3-20 Q3-21 Q3-22 Q3-23
97
(38)
(53)
(11)
2
79
82
(75)
25
125
Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23
Key Subsegment Trends: Multi-Family Tech
20
Multi-Family Tech Highlights Top 10 U.S. Multi-Family Tech Equity Rounds of 2023
Date Company
Selected
Investor(s)
Equity
Invested
Equity
Funding to
Date
Latest
Reported
Valuation
10/31 $70 $120 $270
12/12 $48 $200+ NA
6/7 $35 $67 $285
10/30 $32 $99 NA
1/6 $22 $37 $100
1/26 $15 $22 NA
5/24
BCT Venture
Capital
$13 $33 NA
3/16 $12 $18 NA
10/17 $10 $10 NA
11/29 $9 $9 NA
($M)
AI Tenant Acquisition and Payments Modernization
• The implementation of AI across tenant
acquisition, especially within the virtual
leasing market, has driven substantial
efficiency gains as consumer demand for
multi-family rises.
• Vertical-focused multi-family payment
platforms gaining momentum as landlords
and tenants adopt modernized rent
processing solutions.
• Multi-family property owners/operators
continue to utilize manual “point-solutions”;
daily processes such as leasing, rental
payment processing, and back-office
competencies are at an inflection point, ripe
for digitization.
Highly Fragmented Market for Consolidation
Key Players
Key Players
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
Multi-Family Technology Landscape
Multi-Family Software Platforms
Portal Listing Platforms
Tenant-Focused
Front-End
Communications
Marketing/Resident Onboarding
Touring/Visualization
CRM
Consumer Listing
Tenant Experience Moving
Tenant
Application/
Screening
Tenant
Credit/
Financial
Parking
Tenant
Rewards
Insurance/SDR/
Lease Guarantee
Flex Stay/
Community
Living
Indicates an Operating Subsidiary
21
To view full market map, please contact:
, [email protected], or Pat.Hage[email protected]
Multi-Family Technology Landscape (cont.)
Multi-Family Software Platforms
Lease Admin.
Management/Operations
HOA/Condo Management
PMS
Maintenance/Operations Energy/Utilities Management
Back Office
Data, Analytics, and LMS Payments-Related
Building Connectivity/
Smart Apartments
Access Management
Indicates an Operating Subsidiary
22
To view full market map, please contact:
, [email protected], or Pat.Hage[email protected]
Key Subsegment Trends: Commercial Real Estate
23
(1) Cushman & Wakefield, “U.S. Office MarketBeat Q4 2023.”
(2) New York City represents “New York – Midtown South” office market.
(3) Kastle Systems, Back to Work Barometer.
(4) Trepp, “The Year-End 2023: CRE at a Crossroads.”
1
2
Net Absorption Reached a Multi-Year Low in 2023,
Vacancy Rate Climbing
U.S. Office Market Net Absorption (S.F. in M) and Vacancy Rate (%)
(1)
U.S. net absorption rates remained meaningfully negative, as vacancy
rates continued to increase throughout 2023.
(1)
3
U.S. Office Utilization Increasing, but Still Below Pre-
Pandemic Levels as Employers Accept Hybrid Reality
Kastle’s Back-to-Work Barometer Average for Top 10 U.S. Cities Throughout
the year
(3)
The CRE market remains mixed across geographies as concerns linger about the market’s vacancy rates and long-term return-
to-office trends.
YoY Change in Office Rent Asking Price per Square Foot in Q4 2023
(1)(2)
Changes in Office Rent Rates Highlight Divergence
Across Markets
4
U.S. Near-Term CRE Debt ($B)
(4)
~$1.1 Trillion “Maturity Wall” Approaching for
Commercial Real Estate Debt
$544
$533
2024 2025
With nearly $1.1 trillion of
the outstanding U.S.
commercial real estate
debt maturing before the
end of 2025, borrowers are
under pressure as liquidity
problems persist. Refinancing
risk will remain a key
challenge through 2025.
(4)
98.9%
30.0%
41.6%
47.9%
Feb-20 2021 2022 2023
5.0%
7.4%
2.2%
(5.5%)
Boston Miami NYC - Midtown San Francisco
(2.4)
(12.1)
(12.5)
(22.8)
(20.8)
(14.7)
(19.2)
17.0%
17.2%
17.7%
18.2%
18.7%
19.2%
19.7%
Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23
Net Absorption Vacancy Rate
Commercial Real Estate Tech Landscape
24
Building Operations
IWMS
Tenant Experience Visitor Management
Access Management
Operations and Facility Management
IoT/Smart Buildings
Flex Space Management Parking Management
CRE Software Platforms
Energy Management
Indicates an Operating Subsidiary
To view full market map, please contact:
Sales and Leasing
CRM, Marketing,
and Workflow
Listing Services
Financing Platforms
Portfolio Management Data and Analytics
Funding Marketplaces
Investor ManagementDeal Management
Valuation and AppraisalLease Management
Key Subsegment Trends: Commercial Real Estate Tech
25
Commercial Real Estate (CRE) Tech Highlights Top 10 U.S. CRE Tech Equity Rounds of 2023
Date Company
Selected
Investor(s)
Equity
Invested
Equity
Funding to
Date
Latest
Reported
Valuation
2/13 $133 $239 $474
5/17 $100 $142 NA
10/9 $100 $445 $3,300
5/31 $93 $173 $433
5/17 $93 $116 NA
11/16 $70 $357 $693
6/22 $58 $93 $450
12/6 $50 $104 $1,000
10/18 $50 $150 $560
5/3 $50
(1)
$426 $1,000
($M)
ESG/Regulatory Drivers
• Technology solutions that reduce the climate
impact for CRE owners continue to draw
investment as the industry faces increasing
pressure from regulators to reduce climate
impact.
• CRE owners and tenants have continued to
utilize technology to encourage in-person
attendance while acknowledging that a
hybrid work environment is the “new normal.”
Hybrid Reality
Key Players
Key Players
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
(1) Extension to Series E, bringing total round funding to $250 million.
7.5
8
8.5
9
9.5
10
Mar-21 Nov-21 Jul-22 Mar-23 Nov-23
Key Subsegment Trends: Construction
26
(1) U.S. Census Bureau.
(2) Dodge Construction Network.
(3) Associated Builders and Contractors.
(4) CNN, “What Biden’s Infrastructure Law Has Done so Far.”
(5) Construction Dive, “IIJA Brings New Funds, Challenges to NYC Infrastructure Overhaul.”
1
Nonresidential Construction Spend Hits Record
Levels in 2023
2
Construction Starts Remain Slightly Below 2022 Highs,
Nonbuilding Starts Driven by IIJA Funding
U.S. Seasonally Adjusted Annual Rate of Nonresidential Construction Spend ($B)
(1)
Since the pandemic there has been a large increase in commercial
construction spend, growing 18% YoY.
(1)
Construction starts have slightly weakened as high interest rates and
tight credit have restrained activity.
3
Despite Recent Dip, Commercial Backlogs Remain
Strong as Labor Supply Does Not Meet Demand
4
The IIJA Has Introduced a High Level of Funding for
Infrastructure Projects
Commercial and Institutional Construction Backlog Indicator
(3)
Commercial construction project demand/pipeline at record levels, despite labor shortage and office market uncertainty.
+18% YoY
+4% Since Oct-21
(4%)
Decrease in total construction starts
YoY as of YTD November 2023.
(2)
+19%
Increase in nonbuilding construction
starts YoY as of YTD November 2023.
(2)
(7%)
Decrease in nonresidential construction
starts YoY as of YTD November 2023.
(2)
(14%)
Decrease in residential construction
starts YoY as of YTD November 2023.
(2)
As the spending ramps up into 2025, construction companies will
see a large investment from the U.S. government to start on new
infrastructure projects with:
$550B
Earmarked for new federal
infrastructure projects over a five-year
period.
(4)
~50%
Increase in Federal Transit
Administration and Federal Highway
Administration funding post-IIJA.
(5)
$800
$900
$1,000
$1,100
$1,200
Aug-22 Nov-22 Feb-23 May-23 Aug-23 Nov-23
Key Subsegment Trends: Construction (cont.)
27
(1) National Association of Realtors (NAR) and Freddie Mac.
(2) U.S. Census Bureau.
(3) S&P Capital IQ as of 12/31/2023.
1
The Share of New Single-Family Homes for Sale Has Risen as Homebuilding Has Increased and Existing Homeowners Are
Less Likely to Sell as Mortgage Rates Remain High
2
Undersupply of Single-Family Homes Likely to Persist
as Residential Construction Starts Remain Depressed
When Compared to Pre-2008
3
Positive Sentiment Drives a Market Recovery for
Homebuilding Stocks
Single-Family Homes Construction Starts (in Thousands)
(2)
+59%
S&P Homebuilders Select Industry Index
(3)
U.S. New Single-Family Homes Share of Single-Family Homes for Sale
(1)
Many buyers are opting for new construction homes as builders have been providing attractive concessions, including mortgage rate buydowns
to attract bidders and offload inventory.
+8% Since Dec-20 Year-End
Despite headwinds in the residential real estate market, homebuilder activity has remained strong throughout 2023.
$6,000
$8,000
$10,000
Jan-23 Mar-23 Jun-23 Sep-23 Dec-23
0
500
1,000
1,500
2,000
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
33.6%
10%
20%
30%
40%
Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23
Key Subsegment Trends: Construction Tech
28
Construction Tech Highlights Top 10 U.S. Construction Tech Equity Rounds of 2023
Date Company
Selected
Investor(s)
Equity
Invested
Equity
Funding to
Date
Latest
Reported
Valuation
9/22 $440
(1)
$735 $3,750
2/6 $55 $114 $185
9/12 $52 $150 $342
5/18 $50 $111 $300
6/6 $42 $48 $162
10/30 $41 $41 $121
1/17 $40 $40 $90
11/17 $37 $56 $78
10/18 $24 $44 $117
11/9 $14 $22 NA
($M)
Technology Is Needed to Fill Labor Gaps
• Construction hiring and job openings
continue to outpace labor supply, driving the
need for greater technology adoption within
construction.
• The industrial construction market continues
to benefit from the Infrastructure Investment
and Jobs Act as spending ramps up into 2025,
driving investment and M&A for tech
companies focused on the space.
Industrial Strength
• The construction tech landscape is highly
fragmented and has begun to see
consolidation across multiple subsectors
from both public and sponsor-backed
companies.
Significant Construction Tech M&A
Key Players
Key Players
Key Transactions
Sources: PitchBook, CB Insights, company filings, company websites, press releases.
(1) Includes the Series E extension.
/
/
/
/
/
Construction Technology Landscape
29
Indicates an Operating Subsidiary
Pre-Construction
CAD/BIM
Estimates/Takeoffs
Bid Management
Field Service Management
Operations Management
Compliance
CRM/Marketing Automation
Document Management
Collaboration
Project Management Software
Site Management/Reporting
Planning/Scheduling
Safety/Inspection
Sales Enablement
Proposals/Quotes
Workforce Management
To view full market map, please contact:
, [email protected], or Pat.Hage[email protected]
Construction Technology Landscape (cont.)
30
Indicates an Operating Subsidiary
Procurement/Marketplaces
Robotics
Build Materials
Heavy Equipment
Remodeling
Asset Management
Communication
Materials/Inventory Management
Supply Chain Management
Logistics
Data/Analytics
Payments/Lending
Financial Management Software
Insurtech
ERP/Accounting
CMMS
Fleet Management
Equipment Management
Prefab/Modular
To view full market map, please contact:
, [email protected], or Pat.Hage[email protected]
31
01
EXECUTIVE SUMMARY
02
KEY SUBSECTOR MARKET TRENDS
03
PROPTECH MARKET SUMMARY
04
PUBLIC MARKETS
05
HOULIHAN LOKEY OVERVIEW
06
APPENDIX
2
13
31
35
38
48
Top PropTech Investors in 2023 by Number of Investments
32
Selected 2023 Investments
Multiple, large funds with a dedicated PropTech sector thesis.
Source: PitchBook.
Note: Portfolio companies not necessarily new entrants as of 2023.
Strategic Growth Investors Selected Investments (2022 and 2023)
Asset Owners/Managers
Insurance/Title
Brokerage
Other Strategics
Continued Activity From Strategic Investors
33
Investment arms of real estate, insurance, and brokerage incumbents are increasingly participating in growth rounds for
PropTech companies alongside private equity and venture capital firms or as stand-alone investors.
(2023)
(2023)
Source: PitchBook.
Note: Portfolio companies shown are 2022 investments unless annotated as 2023.
/
(2023)
(2023)
(2023)(2023) (2023)
(2023)
(2023)
(2023) (2023) (2023) (2023)(2023)
(2023) (2023) (2023) (2023) (2023) (2023)
(2023) (2023) (2023)
(2023)
(2023)
(2023)(2023) (2023) (2023) (2023) (2023)
Globalization of the PropTech Market
34
Global PropTech market poised to surpass $32 billion by 2030.
(1)
International PropTech Innovation Gaining Momentum
SIGNIFICANT M&A OUTSIDE OF THE U.S. IN 2023
Brazil
Source: PitchBook, CrunchBase.
Note: All companies shown completed capital raises in 2023.
(1) Zion Market Research.
(2) Ascendix, “What Is PropTech and How It Changed the Real Estate Industry,” 2023.
(3) PitchBook, all transactions with a European-based target in construction technology and real estate
technology (January 2020 to December 2023).
Spain
U.K.
Germany
China
Japan
Australia
Colombia
Mexico
France
Nordics
/ /// /
South Korea
# of PropTech
Companies
(2)
% of M&A
Activity
(3)
805 20%
547 27%
342 12%
304 8%
277 9%
143 9%
140 3%
105 4%
India
European PropTech
M&A Activity Summary
35
01
EXECUTIVE SUMMARY
02
KEY SUBSECTOR MARKET TRENDS
03
PROPTECH MARKET SUMMARY
04
PUBLIC MARKETS
05
HOULIHAN LOKEY OVERVIEW
06
APPENDIX
2
13
31
35
38
48
PropTech Public Company Performance
36
Source: S&P Capital IQ as of 12/31/2023.
2023 Share Price Performance
35%19% 32%58%32% 39%29%93% 31%
2023 Share Price Performance
Public PropTech Ecosystem
32%
31%
35%
58%
32%
29%
19%
39%
93%
(40%)
0%
40%
80%
120%
160%
Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23
Real Estate Media/Portals RE Data/RE Software Residential Brokerage
Commercial Brokerage Traditional Mortgage/Title Credit/Mortgage Marketing
Real Estate Sharing Economy/Travel Broader Data Construction Technology
Broader Data
Commercial
Brokerage
Credit/Mortgage
Marketing
RE Sharing
Economy/Travel
RE Media/
Portals
Mortgage/Title
Residential
Brokerage
Construction
Technology
RE Data/
RE Software
PropTech Public Company Valuation
37
Source: S&P Capital IQ as of 12/31/2023.
Note: Multiples represent mean value of sector group.
2024E Revenue/2024E EBITDA Multiple
9.9x/19.6x1.2x/13.8x 1.9x/13.3x3.1x/11.3x7.0x/20.9x 4.1x/13.7x5.2x/19.5x1.1x/16.3x 8.6x/19.0x
Enterprise Value/2024E Revenue
Enterprise Value/2024E EBITDA
Public PropTech Ecosystem
9.9x
8.6x
7.0x
5.2x
4.1x
3.1x
1.9x
1.2x
1.1x
Broader
Data
Construction
Technology
RE Media
Portals
RE Data/RE
Software
Mortgage/
Title
RE Sharing/
Travel
Credit/
Mortgage
Marketing
Commercial
Brokerage
Residential
Brokerage
20.9x
19.6x
19.5x
19.0x
16.3x
13.8x
13.7x
13.3x
11.3x
RE Media
Portals
Broader
Data
RE Data/RE
Software
Construction
Technology
Residential
Brokerage
Commercial
Brokerage
Mortgage/
Title
Credit/
Mortgage
Marketing
RE Sharing/
Travel
Broader Data
Commercial
Brokerage
Credit/Mortgage
Marketing
RE Sharing
Economy/Travel
RE Media/
Portals
Mortgage/Title
Residential
Brokerage
Construction
Technology
RE Data/
RE Software
38
01
EXECUTIVE SUMMARY
02
KEY SUBSECTOR MARKET TRENDS
03
PROPTECH MARKET SUMMARY
04
PUBLIC MARKETS
05
HOULIHAN LOKEY OVERVIEW
06
APPENDIX
2
13
31
35
38
48
Houlihan Lokey Advises Next One Technology on Its Sale to EQT
39
Houlihan Lokey acted as the exclusive
financial advisor to Next One Technology
(Next) on its sale to EQT.
• On December 20, 2023, Next announced it
had been acquired by EQT.
• Next, headquartered in Linköping, Sweden,
with operations across the Nordics and the
United Kingdom, provides a leading cloud-
based construction technology project
management platform tailored for
construction, maintenance, and contractor
businesses.
2,500+
Customers
130+
FTEs
has received a strategic
growth investment
Undisclosed
Next and HVD Group have an exciting and complementary fit. Not only from a
product perspective, but also in terms of the culture and people, having followed
Mikael and his team over the recent years. We are also confident that a combined
offering will continue to drive our already high customer satisfaction, as we
together with HVD Group will be able to offer an even more comprehensive
product to our end users.
—Johan Jarskog, CEO, Next
Investing in HVD Group and Next creates a strong Northern European platform
with leading tech and product capabilities. We have followed the space for several
years and are excited to back what is in our mind the most attractive platforms in
one of the largest verticals globally. We are extremely impressed by the respective
teams led by Mikael and Johan, and we look forward to bringing EQT Private
Equity's software experience to support the organizations.
—Ali Farahani, Partner, EQT
• Next helps customers to achieve long-term sustainable profitability through
instant visibility on project financial performance, increasing productivity,
slashing administrative time, and ensuring compliance.
• The platform allows SME customers to get more organized and gain a
better business overview, and it also enables smarter and faster
administration, leading to significant improvements in terms of productivity,
control, quality, and profitability.
Transaction Overview Selected Transaction Commentary
Next Platform
Company Highlights
(1)
Sources: Company websites, press releases.
(1) As of 1/3/2023.
Geographical Footprint
Three Offices
One Office
One Office
Headquarter (Linköping) Offices
Project Management
Planning
Procurement
Deviation Handling
Document Management
Financial Management
Project Budget
Payment Plan
Invoice Handling
Project Forecast
Site Execution
Inspections
Journal
Checklists
Staff Register
SEK 200M+
Revenue
The picture can't be displayed.
Houlihan Lokey Advises Treetop on Its Sale to ECI
40
Houlihan Lokey acted as the exclusive
financial advisor to Nedvest, the sole
shareholder of Treetop, on Treetop’s sale to
ECI.
• On December 18, 2023, Treetop, a portfolio
company of Nedvest, announced it had been
acquired by ECI.
• Treetop offers a wide range of enterprise
resource planning software and business
applications that cater to SMBs in the
residential construction and crafts sector in
the Netherlands.
has received a strategic
growth investment
Undisclosed
As this industry continues to evolve and modernize, ECI remains steadfast in its
mission to empower and elevate its customers with investments in innovation, a
top-notch R&D team and global support for customer growth. As Treetop and ECI
join forces, we look forward to continuing the customer-centric approach that has
defined Treetop’s success.
—Geert-Jan den Besten, CEO, Treetop
Treetop empowers business owners through modern technology and automation
that addresses the unique business challenges of the Dutch residential
construction industry. ECI’s heritage as a leader in residential construction
industry software and Treetop’s many decades of experience and deep, loyal
customer base in the Netherlands make a great combination.
—Trevor Gruenewald, CEO, ECI Software Solutions
• Treetop’s connected software platform enables construction companies to
seamlessly manage business processes and deliver meaningful digital
transformation.
• In 2024, Treetop plans to launch a new cloud-native ERP software solution
for smaller construction companies, delivering substantial value.
Transaction Overview Selected Transaction Commentary
Company Highlights
(1)
All-in-one ERP software
built specifically for
SMB construction
companies.
ERP software platform for
middle-market
construction companies.
2D/3D building design
software for
constructors.
a portfolio company of
has been acquired by
Sellside Advisor
Construction managed
services provider.
Customer and quality
processes software.
Construction software
for the self-employed.
Treetop Platform
Sources: Company websites, press releases.
(1) As of 1/8/2024.
120+ FTEs
6 Unique Brands
3,000+ Customers
Houlihan Lokey Advises TruArc Partners on Its Acquisition of Watchtower Security
41
Houlihan Lokey acted as the exclusive buyside
financial advisor to TruArc on its acquisition
of Watchtower Security.
• On December 1, 2023, TruArc Partners
announced it had acquired Watchtower
Security.
• Watchtower Security, headquartered in St.
Louis, provides state-of-the-art managed
video surveillance and analytics solutions to
property managers and owners in the multi-
family housing market.
• Watchtower’s integrated end-to-end solution
offering protects properties through best-in-
class software, hardware, and ancillary
services, including 24/7 system monitoring.
has received a strategic
growth investment
Undisclosed
Transaction Overview Selected Transaction Commentary
Watchtower Platform
Company Mission
Sources: Company websites, press releases.
has acquired
Buyside Advisor
TruArc is thrilled to welcome Watchtower into our portfolio. Asset
protection continues to be an active investment theme that we have
great conviction in. We believe that Watchtower’s recurring business
model and commitment to innovation and customer satisfaction align
seamlessly with our investment framework.
—Brandon Kiss, Partner, TruArc Partners
We aim to be the national leader in providing video surveillance services
to the multi-family housing industry and intend to achieve it by
developing a staff that is passionate about providing premium service and
technology while adapting to emerging client needs.
Differentiated video surveillance platform exclusive to multi-family.
Watchtower’s full-service approach allows property managers 24/7
property insights while delivering substantial cost savings.
System Monitoring
Forensic Video
Review
All-Access
Surveillance Portal
Property Protection
Software
Houlihan Lokey Advises Stirling Square on Its Acquisition of Infobric
42
Houlihan Lokey acted as the exclusive
financial advisor to Stirling Square Capital
Partners on its acquisition of Infobric from
Summa Equity.
• On June 21, 2023, Stirling Square Capital
Partners announced it had acquired Infobric
from Summa Equity.
• Infobric, headquartered in Sweden with
operations across the Nordics and the United
Kingdom, provides end-to-end construction
software products supporting the
digitalization of the construction industry.
10,000+
Customers
300,000+
Individual Users
Equipment and AssetsWorkforce
has received a strategic
growth investment
Undisclosed
We are proud to welcome Stirling Square as our new investor as they bring sector
expertise, local market knowledge as well as pan-European expertise which will be
critical as we continue to expand internationally. Importantly, they also share
Infobric’s values as growth-oriented, long-term entrepreneurial investors who share
our commitment to sustainability.
—Dan Friberg, President and CEO, Infobric
We are delighted to invest in Infobric alongside its ambitious management team
who have built a software leader in the build phase of the construction value
chain. We look forward to bringing our experience in the contech sector to
support the business to accelerate its impressive growth trajectory, including
enabling further international growth and expanding the software offering.
—Patrick Severson, Partner, Stirling Square
• Infobric enables its customers to manage site safety, machinery and
equipment, contracts, and workers and provides efficient sharing of
resources and workforce optimization.
• Since being acquired by Summa in 2018, Infobric has pursued impressive
geographical growth and expanded its offering, while making several
acquisitions across the sector. Infobric is now the market leader in Sweden,
Norway, and the U.K.
(Announced
3/16/2023)
(Announced
3/17/2023)
Transaction Overview Selected Transaction Commentary
Infobric Platform
Company Highlights
(1)
Recent Bolt-On Acquisitions
Rich Data Insights Reduces Time and
Administration Effort
Data Sharing
Between Sites
Mobile Workforce
Management
Site Workforce
Management
Contractor
Management
Fleet and Asset
Management
(Announced
1/5/2023)
(Announced
3/30/2023)
Sources: Company websites, press releases.
(1) As of 6/21/2023.
has acquired
a portfolio company of
Buyside Advisor
Transaction Overview
Houlihan Lokey Advises BoomTown on Its Sale to Inside Real Estate
43
Houlihan Lokey acted as the exclusive
financial advisor to BoomTown on its
sale to Inside Real Estate.
• On January 20, 2023, BoomTown
announced that it had been acquired by
Inside Real Estate.
• BoomTown is the leading end-to-end
residential real estate technology
platform for high-producing agent-
teams and brokers, enabling a seamless
workflow from lead to close.
• The transaction will create an industry
leading provider of residential real
estate software and services, across
product and customer segments.
No. 1
User-Rated Real Estate
CRM
40%
Real Trends Top 250
Teams Served
350+
Employees
~100k
Real Estate Professionals
Served
Fully Integrated
Predictive CRM
Cloud-based intelligent CRM automates lead capture
and engagement to drive leads to conversion.
Lead and workflow management tools allow agents to
identify, target, and convert their highest probability
buyers/sellers.
Comprehensive
Transaction
Management and
Back-Office
Platform
Integrated transaction management platform creates
seamless lead-to-close solution.
Full suite of capabilities including commission
au
tomation, accounting, agent management, and
reporting/analytics tools.
Premier Front-
Office Solution for
Agents, Teams,
and Brokers
Category-leading custom IDX-integrated websites
specifically designed for residential RE brokers and
teams.
Data-driven digital marketing with dynamic campaign
management enables high-ROI lead generation.
Joining Joe and the talented Inside Real Estate team enables us to continue on
our combined mission to serve the real estate industry with world class
technology and services. With a clear vision for the future, we look forward to
accelerating the pace of innovation to fuel our clients’ growth and success.
”
Grier Allen,
Co-Founder and CEO,
BoomTown
I’m thrilled to welcome BoomTown to the Inside Real Estate family! Our
companies share a common DNA that is focused on driving real results for every
client, every day. Together, we will deliver an unmatched experience for every
user from single agents, to top performing teams and mega teams, to robust
national enterprise brands.
Joe Skousen,
CEO,
Inside Real Estate
“
”
“
Sources: Company websites, press releases.
BoomTown Highlights
Selected Transaction Commentary
has been acquired by
Sellside Advisor
Houlihan Lokey Advises BoomTown on Its Sale to Inside Real Estate (cont.)
44
Sources: Company websites, press releases.
Combine to Create a Category Leader in RRE Technology
2018
2020 20232019
2021 2022
First Complete
and Modern Back-
Office Suite
No. 1 Front-Office
Experience
BoomTown and Inside Real Estate
combine to create a category leader
in residential real estate technology.
Brokermint transaction positions
BoomTown as an industry-leading
end-to-end platform.
AmpStats transaction strengthens
Inside Real Estate’s recruiting
features.
BoomTown acquisition of
RealContact as precursor to Success
Assurance concierge solution.
MyAgentFinder acquisition launches
BoomTown Marketplace.
dashCMA acquisition amplifies Inside
Real Estate’s pricing capabilities.
Leading
Marketplace and
Tech Partner
Ecosystem
Industry-Leading
Home Ownership
Solutions
Lovell Minnick Partners investment
supports Inside Real Estate’s long-
term strategy.
2019
Genstar Capital provides additional
capital to Inside Real Estate to
accelerate growth.
2021
The Growth of a Category-Leading Platform
• The combined technology will deliver an enhanced and elevated front-office experience that supports every type of user—from single
agents, to top-performing teams and mega teams, to top brokerages and enterprise brands in growing their businesses.
• Together, the company’s combined portfolio of back-of
fice solutions, including CORE Back Office, Brokermint, and Inside Real Estate’s
recently acquired AmpStats, will provide the foundation for the industry’s most innovative, modern, and complete back-office solution.
• Inside Real Estate’s marketplace of leading add-on
services and solutions, including the Propertyboost listing promotion and lead
generation tool, will continue to expand and be paired with a new Preferred Partner program, unlocking additional value and
differentiation for customers through a vetted, network of premium, tightly integrated partner solutions.
• Inside Real Estate will continue to invest heavily in the first integrated lifetime homeownership platform, CORE Home. The techn
ology,
paired with smart affiliated services solutions and branded for Inside Real Estate’s customers, will place brokers and agents at the heart
of the consumer relationship.
A Global Leader in Technology Advisory
Note: Ranking based on data provided by Refinitiv. Excludes accounting firms and brokers.
(1) As of December 2023; excludes corporate MDs.
(2) As of January 31, 2024.
(3) LTM ended December 31, 2023.
Expertise in High-Growth Technology
Sectors
Significant experience and expertise across
vertical and horizontal business management
software, HCM, property tech, tech-enabled
services, UCaaS, industrial tech, data and
analytics, FinTech, adtech, and cyber.
Global Tech Coverage and
Knowledge
Our global footprint with offices in key
M&A markets in the Americas, Asia, and
Europe gives us integrated coverage,
while our local roots mean that we have
a strong understanding of the markets
we cover.
15 technology offices globally
150+ technology-focused financial
professionals
40+ technology-focused Managing
Directors
Broad and Deep Investor Coverage
29
senior officers dedicated to the
sponsor community the America’s and
Europe.
Coverage of
1,000+ private equity
firms,
250+ credit funds, and 70+
family offices.
Catalog and deal experience on financial
sponsor preferences and behaviors.
Houlihan Lokey’s Capital Markets Group
comprises more than 90 dedicated
professionals across 11 offices in five
countries that raised approximately
$26
billion
in capital during over the past
two years.
Key Facts and Figures
2,000+
CLIENTS SERVED
ANNUALLY
312
MANAGING
DIRECTORS
(1)
~2,000
TOTAL FINANCIAL
PROFESSIONALS
36
LOCATIONS
WORLDWIDE
$1.8B
REVENUE
(3)
$8.3B
MARKET
CAPITALIZATION
(2)
Partner-Led Approach
Providing unbiased, insightful advice in the best interest of our clients, Houlihan Lokey will have significant senior resources dedicated to
guiding clients.
45
2023 M&A Advisory Rankings
All Global Technology Transactions
Deals
Advisor
89
Houlihan Lokey1
76
Rothschild & Co2
68
JP Morgan3
63
Goldman Sachs & Co4
59
Morgan Stanley5
Source: LSEG (formerly Refinitiv).
Excludes accounting firms and brokers.
36
LOCATIONS
WORLDWIDE
150+
TECHNOLOGY
FINANCIAL
PROFESSIONALS
40+
TECH MANAGING
DIRECTORS
89
TECHNOLOGY
DEALS IN CY23
No. 1
GLOBAL TECH
M&A ADVISOR*
Local Technology Team
Americas
Atlanta
Baltimore
Boston
Charlotte
Chicago
Dallas
Houston
Los Angeles
Miami
Minneapolis
New York
San Francisco
São Paulo
Washington, D.C.
Asia-Pacific
Beijing
Fukuoka
Gurugram
Hong Kong SAR
Mumbai
Shanghai
Singapore
Sydney
Tokyo
Europe and Middle East
Amsterdam
Antwerp
Dubai
Frankfurt
London
Madrid
Manchester
Milan
Munich
Paris
Stockholm
Tel Aviv
Zurich
*Source: LSEG (formerly Refinitiv). Excludes accounting firms and brokers.
Our Tech M&A Team Is No. 1 Globally With Unrivaled Reach
46
Houlihan Lokey’s Subsector Research
47
Click on the images below to access Houlihan Lokey’s recent sector-specific reports.
Commercial Real Estate Technology Multi-Family Technology Construction Technology
Travel & Hospitality Technology Field and Frontline Operations
48
01
EXECUTIVE SUMMARY
02
KEY SUBSECTOR MARKET TRENDS
03
PROPTECH MARKET SUMMARY
04
PUBLIC MARKETS
05
HOULIHAN LOKEY OVERVIEW
06
APPENDIX
2
13
31
35
38
48
EquipmentShare Raises $150 Million in Series E Extension Round
49
Series E Extension
Led by
$150M Equity Raised
Transaction Overview EquipmentShare Overview
• On September 13, EquipmentShare
announced its $150 million Series E
extension funding round led by BDT &
MSD Partners.
• EquipmentShare is a leading equipment
and digital solutions provider serving the
construction industry.
• By empowering contractors, builders, and
equipment owners with its proprietary
technology, T3, EquipmentShare aims to
drive productivity, efficiency, and
collaboration across the construction
sector.
Platform Overview
Sources: PitchBook, company website, press releases.
Selected Deal Commentary
Headquarters Columbia, MO
Founded 2015
Description
Developer of a fleet management platform intended to serve
contractors and original equipment manufacturers. The company’s
platform offers services that include insurance verification,
background checks, payment processing, and an easy interface for
lending and renting contracting equipment, enabling construction
contractors to make informed decisions about their equipment and
fleet through automated data collection.
Select Current
Investors
Through a combination of deep,
hands-on industry knowledge
and cutting-edge technology
systems, EquipmentShare is
helping to make the rental
equipment market and broader
construction space more
productive, efficient and safe.
–Henry Yeagley,
Partner, BDT & MSD Partners
T3 Technology Platform: The OS for Construction
This round of funding not only
attracts fresh capital from both
new and existing investors, but it
also showcases our ability to
stand tall in a challenging
macroeconomic landscape,
positioning us for even greater
success in the future.
–Jabbok Schlacks,
Co-Founder and CEO,
EquipmentShare
Inventory
Management
Cost Capture
CRM
Work Orders
Analytics
Time Tracking
Fleet
Management
E-Logs/
Reporting
Limble Raises $58 Million in Series B Round
50
Series B
Led by
$58M Equity Raised
Transaction Overview Limble Overview
• On June 22, Limble announced its $58
million Series B funding round led by
Goldman Sachs Growth Equity.
• Limble provides a leading CMMS
software that streamlines everyday
maintenance workflows and drastically
lowers stress from unexpected
breakdowns.
• In 2022 alone, maintenance teams used
Limble to save hundreds of millions of
dollars in downtime, parts spend, and
labor while doing the unseen work of
keeping our world safe and functional.
Platform Overview
Sources: PitchBook, company website, press releases.
Selected Deal Commentary
Headquarters Lehi, UT
Founded 2015
Description
Developer of computerized maintenance management software
designed to track, manage, schedule, and report maintenance
activities. The company’s platform has a variety of features such as
asset management, work order, preventive maintenance, predictive
maintenance, inventory, and vendor management, enabling
professionals to increase efficiency and reduce costs.
Select Current
Investors
Limble has disrupted this market
with an intuitive, user-friendly,
and modern CMMS that
streamlines even the largest
operations, and fast
implementation means customers
see ROI within weeks. The
product has proven its value with
thousands of customers
worldwide.
–Brendon Hardin,
Vice President,
Goldman Sachs
The success of Limble can truly
be credited to a deep
understanding of the specific
challenges that face maintenance
and facility managers, and the
design of a powerful yet
streamlined system to solve
those problems. We set out to
empower the maintenance
professionals.
–Bryan Christiansen,
Founder and CEO,
Limble
Work Order Management Spare Parts Inventory
Preventive Maintenance
Predictive Maintenance
Asset Management
Reports and Dashboard
$135M
Customers saved in
downtime costs in 2022.
$68M
Customers saved in parts
spend in 2022.
$442M
Customers saved in reduced
labor costs in 2022.
HqO Raises $50 Million in Series D Round
51
Series D
Led by
$50M Equity Raised
Transaction Overview HqO Overview
• On October 18, HqO announced its $50
million Series D funding round led by
Koch Real Estate Investments.
• HqO leverages real estate experience
insights from 1.7+ million people and
8,000+ workplaces to inform its tenant
experience platform.
• Through its Real Estate Experience (REX)
platform, a powerful and dynamic suite of
applications and services, HqO has
powered over 400 million square feet at
more than 700 properties across 32
countries.
Platform Overview
Sources: PitchBook, company website, press releases.
Selected Deal Commentary
Headquarters Boston, MA
Founded 2015
Description
Developer of a professional tenant experience platform designed to
connect people to places, experiences, and each other. The
company’s platform offers a tool for startup companies to search
for products or services and get connected with professionals who
can provide advice, references, and introductions, enabling users to
communicate with their closest business contacts and connect with
new partners.
Select Current
Investors
By developing cutting-edge
technology and tools that
prioritize user sentiment, HqO is
not only adapting to the rapidly
changing real estate industry, but
driving its progression. With
HqO’s vision and our investment,
we are confident that together we
are building a more
transformative ecosystem.
–Justin Wilson,
Managing Director,
Koch Real Estate
HqO is here to reimagine the
status quo and lead the charge
toward a more connected,
efficient, and user-centric real
estate experience. We’re
doubling down on our
commitment to connect real
estate to the people and help
create spaces that truly serve the
evolving needs of those who use
them.
–Chase Garbarino,
Co-Founder and CEO,
HqO
Experience Manager
HqO REX Platform
Intelligence
Marketplace
Asset-agnostic, cross-property tenant
experience management system
Standard for measuring and assessing
end-user experience within a property
Directory of services and amenity
partners
Funnel Leasing Raises $32 Million in Series B-2 Round
52
Series B-2
Led by
$32M Equity Raised
Transaction Overview Funnel Leasing Overview
• On October 30, Funnel Leasing
announced its $32 million Series B-2
funding round led by RET Ventures.
• Funnel provides renter management
software (RMS) built on a foundation of
modern, renter-centric technology.
• The financing expands Funnel’s sales and
marketing teams significantly.
• The round further recognizes the
completion of Funnel’s front office suite
including CRM, virtual leasing agent,
online leasing, onboarding, and a resident
portal.
Platform Overview
Sources: PitchBook, company website, press releases.
Selected Deal Commentary
Headquarters Odessa, FL
Founded 2010
Description
Developer of a cloud-based real estate marketing software
designed to manage inventory and optimize the renter experience
from prospect to close. The company’s software offers complete
marketing and leasing management services, enabling residential
professionals to manage inventory, track leads and deals, advertise
listings, and access performance analytics.
Select Current
Investors
Our conversations with our
strategic investors point to the
need for a streamlined,
centralized operating model that
leverages automation to reduce
costs for multifamily operators
while improving the customer
experience. Only Funnel’s renter-
centric architecture empowers
operators to make these needed
changes.
–John Helm,
Founder and Partner,
RET Ventures
The future of multifamily
leverages enterprise-grade
technology, automations and
shared services to provide
renters and residents the best
experience at every step of their
journey—from inquiry to move-
in to renewals—all while making
teams’ roles more engaging.
–Tyler Christiansen,
CEO, Funnel
86%
Initial inquiries handled
by automation.
90%
Increase in tours
scheduled.
85%
Increase in lead-to-lease
conversion.
Renter-
Centric
CRM
Reporting
Online
Leasing +
Renewals
Resident
Onboarding
+ Portal
ILS
Syndication
AI Agent:
Email, SMS,
Chat, and
Voice
Contact
Center
Software
Trane Technologies Acquires Nuvolo
53
Trane Technologies Financial Detail
(1)
Trane Technologies’ Three-Year Stock Price Performance
Transaction Overview
Acquired
Undisclosed
• On October 3, Trane Technologies (Trane)
announced that it had signed a definitive
agreement to acquire Nuvolo for an
undisclosed amount.
• Nuvolo, a global leader in modern, cloud-
based connected workplace and enterprise
asset management products and solutions,
will augment Trane’s offerings across retail,
life sciences, and education.
• Following the close of the transaction,
Nuvolo’s Founder and CEO, Tom Stanford,
will join Trane in a leadership role and
continue to lead the Nuvolo business.
0.0M
2.0M
4.0M
6.0M
8.0M
$110.00
$135.00
$160.00
$185.00
$210.00
$235.00
Dec-20 May-21 Oct-21 Mar-22 Aug-22 Jan-23 Jun-23 Nov-23
Stock price hits three-year
low as overall market
constricts due to interest
rate hikes.
$12,455
$14,136
$15,992
$17,683
$18,673
$1,762
$2,273
$2,658
$3,187
$3,439
CY20A CY21A CY22A CY23E CY23E
Revenue EBITDA
($M)
Sources: S&P Capital IQ as of 12/13/2023, PitchBook, company website, press releases.
(1) Estimates per S&P Capital IQ.
CAGR:
11%
CAGR:
18%
Trane announces $350M
acquisition of Farrar Scientific
September 13, 2021.
Trane announces $110M
acquisition of Tozour Energy
April 1, 2022.
Trane announces acquisition
of Nuvolo
October 3, 2023.
Nuvolo Overview
Trane Technologies Acquires Nuvolo (cont.)
54
Strategic Rationale
Sources: PitchBook, company website, press releases.
Select Transaction Commentary
Nuvolo is an outstanding fit with Trane Technologies’ strategy to broaden
the impact of our climate leadership and innovate for sustainability. With
this acquisition, we see an opportunity to accelerate Nuvolo’s global
growth and unlock new value and offerings for our respective customers
and partners. We look forward to welcoming the talented Nuvolo team as
we further expand our digital leadership with cloud-based solutions and
services that help our customers achieve their decarbonization and
workplace transformation goals. This bolt-on acquisition follows our
proven model of adding leading technologies that augment our core
business and scaling them to deliver strong returns over time.
–Paul Camuti, EVP and CTO, Trane
Following a decade of innovation and growth, we dedicated ourselves to
finding an extraordinary partner aligned with our core values and future
vision, who could take Nuvolo to the next stage of development. We are
thankful to have found that partner in Trane Technologies. As a global
decarbonization pioneer, Trane Technologies shares our commitment to
innovation, forward thinking and a relentless commitment to customer-
focused solutions. We are proud to be part of the Trane Technologies
family, and excited about the next phase of growth with this new
partnership.
–Tom Stanford, Founder and CEO, Nuvolo
Assists Customers in Meeting Decarbonization Goals
Together, Trane and Nuvolo will deliver significant value to customers who are
looking to reduce their climate footprint via its cloud-based building
automation systems.
Enterprise Asset Management
Nuvolo’s Connected Workplace software will be incorporated into Trane’s asset
management system, providing facilities managers insight into asset lifecycle
management via centralized vendor dashboards.
Unified Cloud-Based Workplace Management
The newly combined platform will benefit from the growing convergence of
workplace management, occupancy analytics, and HVAC controls, as building
managers look to streamline energy efficiency protocols.
Headquarters Wellesley, MA
Founded 2014
Description
Developer of a connected workplace platform designed to help
businesses optimize their facilities, staff, and assets. The platform
provides operational technology security, automates workflows, and
keeps inventory data accurate and reliable along with space
management, enabling enterprises to manage their assets and
improve operational efficiency.
Selected Prior
Investors
Foundation Software Acquired AboutTime Technologies
55
Acquired
Undisclosed
Transaction Overview Foundation Software Acquisition History
• On May 4, Foundation Software
announced it had acquired AboutTime
Technologies, developer of WorkMax, for
an undisclosed sum.
• WorkMax is a web-based mobile resource
management solution that enables
construction companies to track and
manage their time and labor.
• The combination of AboutTime’s resource
management solution with Foundation
Software’s leading products in
construction software further enables
Foundation Software to seamlessly
deliver a robust suite of services.
AboutTime Platform Overview
Sources: PitchBook, Bloomberg, company website, press releases.
A Portfolio
Company of
Aug 2020 Jan 2022 May 2023
May 2021 June 2022
Acquired Acquired Acquired
AcquiredAcquired
Instantly Reduce Labor Costs by Tracking Progress,
Productivity, Time, Compliance, Safety, and Risk
Time
Easy-to-Use Point and
Click, Time-Tracking
Solution
Forms
Digital Data Collection
Assets
Asset and
Equipment Tracking
Insight
Progress, Productivity,
and EVM
AboutTime Overview
Foundation Software Acquired AboutTime Technologies (cont.)
56
Sources: PitchBook, company website, press releases.
AboutTime Technologies is a great addition to the Foundation
Software product family because we share similar values—we both
want to provide integrated, best-of-breed solutions to the
construction community. We’ve known the team at AboutTime for
years, so this fit feels very natural. The whole team is excited to
take this to the next level.
—Mike Ode, CEO, Foundation Software
Select Transaction Commentary
Since 2004, AboutTime has blazed trails with award-winning
innovation for the construction industry and is truly the gold
standard. AboutTime and WorkMax solutions deliver a significant
positive impact for thousands of contractors around the globe,
every day. Today is a monumental day as we have joined forces
with another proven industry leader, Foundation Software. We are
confident this will help continue to serve customers well and will
propel AboutTime and WorkMax to amazing new levels. We could
not be more excited for the future.
—Ryan Remkes, CEO, AboutTime Technologies
Strategic Rationale
Grow Global Customer Base
The transaction allows Foundation Software to expand its current customer
base to the thousands of contractors around the globe that AboutTime
currently serves.
Improve Field-to-Office Collaboration
AboutTime’s solutions will be implemented into Foundation’s software suite
and allow companies to easily track and manage their time and labor, assets,
forms, compliance, productivity, and project cost management in real-time.
Expand Offerings
Together, the combined platform will provide a full end-to-end suite of
construction solutions to contractors and strengthen Foundation’s back-office
operations offerings.
Headquarters Payson, UT
Founded 2003
Description
Developer of mobile resource management and attendance
tracking software designed to help manage company data more
efficiently. The company specializes in tracking mobile employees
and their production through GPS, biometric fingerprint
recognition, sync technologies, and other technological services,
thereby helping companies connect with teams and leverage
technology to make their business more profitable.
Selected Prior
Investors
N/A
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57
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