There are more than 100 Israeli startups in Israel in the field of property technologies, or PropTech, which brings innovation to the fields of construction, asset insurance and property management, newly released figures show.
The number of startups operating in the field has jumped 244%; only five years ago, there were just 27.
The research also indicates that over the course of the last two years, many construction tech startups have seen market penetration for their products due to the growing need for safety measures solutions in light of recent notorious construction site accidents. Some of these technologies even seem to be ahead of their time when it comes to workplace safety regulation, the study said.
The findings of a study examining the PropTech field over the last decade were released by the VC Innogy Innovation Hub together with ConTech, an innovation program by the Israel Builders Association, in partnership with the Housing and Construction Ministry and the Economy Ministry.
The volume of global construction output will grow to $15.5 trillion in 2030, a report by consultants PwC shows. But most construction sites today still use traditional tools, and some of the technologies are hundreds of years old. The first known construction cranes were built by the ancient Greeks; hammers were first used in the Stone Age. Security practices are flawed and there is a chronic shortage of workers to operate the machinery in an industry that often needs to meet tight deadlines.
Investments in PropTech continue to grow globally, jumping to $4 billion in 2018, compared to $2.8 billion in 2016 and $3.4 billion in 2017, the study said.
In Israel, $200 million was invested in the sector in 2018, and overall, for the last decade, PropTech investments in Israel amounted to $1 billion.
Innogy Innovation Hub partners globally with startups to invest in and accelerate businesses to boost their growth, The hub has activities in Silicon Valley, London, Berlin, and Tel Aviv, with a portfolio of 70 startups and an equity value of €160 million.
“As an international investor, one of the most interesting fields today is PropTech, which is why we had set out to do this research,” said Mickey Steiner, the director of the Innogy hub in Israel, in a statement. PropTech “is a crucial issue” and the Israeli market is both interesting and matured due to rising local competition in the sector and because advanced technologies such as artificial intelligence (AI), lasers, augmented reality (AR), and others, have become much more available and inexpensive.
“Today, these technologies allow incredible developments that improve efficiency in otherwise traditional construction processes, and help solve safety problems that are a major concern for construction tech,” he said.
The VC firm set up its innovation hub in Israel in 2015 to scout for promising startups in the field of cybersecurity, smart and connected and disruptive digital technologies.
Contech is a construction tech hub that fosters Israeli technologies with the support of the government. It aims to grow the construction tech startup ecosystem while helping form business connections between startups and industry players in Israel and abroad.
“Construction tech, according to every expert in the field, is in for a dramatic leap that would essentially change the entire construction industry over the next ten years,” said Zachi Flatto, chief investment officer at Contech. “Our mission is to turn Israel into a world leader in innovation, making it the ‘Silicon Valley’ of construction tech.”