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Wall Street Journal / Biz - Money

Investors Expect More M&A in Real-Estate Tech Sector

Investors and startups in the real-estate technology sector are anticipating a wave of mergers and acquisitions in the coming year as the market continues to grow, according to a new global survey.


By

Keiko Morris

Investors and startups in the real-estate technology sector are anticipating a wave of mergers and acquisitions in the coming year as the market continues to grow, according to a new global survey of investors and startup companies.

The survey showed that 76% of those polled in the second quarter, said they expected more purchases and mergers of companies in the sector in the next 12 months. That was up from 58% in the fourth quarter of last year, according to the report issued by MetaProp NYC, a real-estate technology investment and advisory firm. The report surveyed 1,700 investors and startup founders and chief executives.

Startup founders and executives expressed optimism about deal making. Almost a third said it is likely or very likely their companies would be acquired, go public or have some other type of major liquidity event in the next two years, according to the survey.

The sector already has begun to see some big deals, said MetaProp co-founder and managing director Aaron Block. He noted last year’s merger of VTS and Hightower Inc., companies that offer products to help commercial real-estate owners and brokers manage their businesses.

“We are starting to see these things happening at a faster and increasing volume of international focus,” Mr. Block said. “These are all very good signs of a growing and robust market, but it is by no means near saturation.”

Some investors expressed caution. In the second quarter, 23.8% of them said they anticipated making fewer investments in the next 12 months, up from less than 8% at the end of last year, the survey showed.

Nevertheless, startup founders and chief executives were optimistic about the investment landscape. A little more than 80% said they expected raising venture capital would be easier or the same in the coming year, compared with about 73% in the fourth quarter of last year, according to the surveys.

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