Nigerian Prop-Tech Industry in 2022

Nigerian Prop-Tech Industry in 2022

The Nigerian prop-tech industry is currently valued at $2 billion and is expected to grow to $5 billion by 2025 with several tech startups driving its growth, innovation, and development. While the global Prop-tech market is expected to be worth $11.7 billion in 2022, it is expected to grow at a compound annual growth rate of 12.5% to reach $23.79 billion by 2027.

Over the next 20 years, the value of investments in the global Prop-tech industry is expected to increase by an average of 5.2%, surpassing $85 trillion (2022-2050). There are now over 6,000 prop-tech startups worldwide, and statistics show that global prop-tech investment increased from $2 billion in 2013 to $18 billion in 2018. Between 2017 and 2019, Prop-tech startups raised $18.7 billion in 598 transactions, with the number of Prop-tech transactions increasing by 33% from 187 in 2017 to 250 in 2019. In Q1 2022, VCs invested $1 billion in prop-tech, a 41% increase from Q4 2021.

However, according to UN statistics from October 2021, Nigeria, a country of about 220 million people, has a housing crisis with 22 million housing gaps.

During the NIPROPTECH 22 conference in Lagos, Roland Igbinoba, President of the association, stated that “Prop-Tech” is the critical infrastructure required to solve our housing problem at scale. Prop-tech, he claims, will not increase housing supply, but will increase housing accessibility by optimizing existing housing stocks.

“Africa’s Prop-tech startups are now looking beyond low-tech property search. Prop-tech addressing property verification, construction optimization and costs, rent financing, Co-living, property and facility management, tenant experience, Blockchain, VR, big data, AI, and 3D printing are tools that can solve our housing problem at scale,” he added.

According to Igbinoba, a symbiotic collaboration between startups and the real estate industry is unquestionably required for Prop-tech startups to scale up.

Technology to define future of real estate as prop-tech gains ground - Businessday NG

Factors Responsible for the Growth of the Prop-Tech Industry in Nigeria

Although there is still much ground to be covered in terms of housing needs in Nigeria, there is a surge in the prop-tech industry, which is being driven by several factors, including the increasing use of technology in the real estate sector, the growing population and middle class, and the country’s increasing urbanization.

Technology is becoming more important in the Nigerian real estate sector, with several startups offering innovative solutions to the sector’s challenges. One of the most significant problems confronting the Nigerian real estate sector is a lack of transparency, which has resulted in several scams and frauds. However, several startups are addressing this problem by creating platforms that provide accurate and up-to-date information on properties, prices, and transaction history. This will contribute to greater transparency in the sector and make it easier for buyers and sellers to find properties that fit their budgets and needs.

Nigeria’s population is currently estimated to be over 220 million, with a projected increase to over 400 million by 2050. This population growth, coupled with the growing middle class, is creating a large and growing market for real estate. This is leading to increased demand for prop-tech solutions that can help make buying, selling, and renting property easier and more efficient.

Furthermore, Nigeria’s increasing urbanization is driving demand for prop-tech solutions with over 60% of the population expected to live in cities by 2030, slightly more than 50% in 2010. This urbanization is necessitating the development of new and innovative real estate solutions that can assist in making cities more livable and efficient. Some startups are developing prop-tech solutions to these problems, such as platforms that connect tenants with landlords and apps that help find parking spaces in congested urban areas.

Some Major Moves by the Nigerian Prop-tech Startups in 2022

What is PropTech?

Nigerian Prop-tech accelerators

In the previous year alone, Nigerian Prop-tech accelerators participated in the African Prop-tech sector. Spleet and Estate Intel were accepted into the MetaProp Accelerator Program in New York in September 2021. Also, Small Small Technology was accepted into Techstars Toronto, and RedSwan CRE was accepted into the Aldar Program in Dubai in 2022. The ARM Labs, Techstars Accelerator program recently launched in Lagos to invest in Africa’s early-stage Prop-tech and Fin-tech startups where up to 12 startups will be chosen yearly.

The leading prop-tech startups in Nigeria

Nigeria’s thriving real estate industry attracts significant interest from foreign investors. Leading Nigerian prop-tech startups are playing a critical role in transforming the sector and making it more efficient and accessible. Property Match, a digital platform connecting buyers and sellers; Property Finder, an online real estate marketplace; and Realty Point, a real estate development and management company, are among Nigeria’s most notable prop-tech startups. These startups are leveraging technology to make the buying, selling, and managing of real estate more efficient and straightforward. They are also contributing to the transparency and accessibility of the Nigerian real estate industry to foreign investors. The leading prop-tech startups in Nigeria are positively impacting the country’s economy and helping to position the country as a global player.

Nigerian Prop-tech Funding in 2022

As of 2021, startups in the space have secured over $2 million in investments. There are over 70 active Prop-tech startups in Nigeria alone according to an August 2021 Prop-Tech Nigeria survey.

This year, the prop-tech sector is not missing out on yet another record funding that the country’s tech startup ecosystem is witnessing, having opened the year with Whose Your Landlord (WYL) announcing a $2.1 million pre-seed funding, led by Black Operator Ventures (Black Ops Ventures) in February. Also in October, another Nigerian Prop-tech startup, Spleet announced a $2.6 million seed funding round led by MaC Venture Capital channeled towards provision for rent financing in the country, particularly Lagos state. In that same month, SmallSmall raised $3 million in a seed round to scale its products across Port Harcourt, Enugu, and Jos before the end of Q1 2023.

Additionally, in November, Cutstruct announced securing $600,000 in a pre-seed round led by Zedcrest Capital, DFS Lab, and Lofty Inc to scale its construction procurement services. Earlier this month, another Nigerian prop-tech startup, VENCO secured $670,000 pre-seed to enhance living experiences in residential and commercial communities in Africa.

It is obvious that the sector has been making significant progress especially, in the area of funding, coming from just $2 million in 2021 to over $8.9 million in 2022 so far and more is to be expected come 2023.