It’s like proptech hit Ctrl+Alt+Delete this year. Entire companies disappeared, and funding plateaued (again) as the industry adjusted its own expectations in a wider commercial real estate universe struggling to rightsize.

“The last year has been a very, very tough year for the industry,” said L.D. Salmanson of data cruncher Cherre, one of the honorees on this year’s Commercial Observer Power Proptech list. “And, as a result, it’s also been a very difficult year for technology companies trying to sell into the industry in one of the toughest real estate and financial climate environments in history.”

For a few years there, proptech was sailing. Just about any service offered enjoyed robust demand amid the panic of the pandemic, and venture capital funding in particular crested one annual or semiannual record after another. The music stopped in 2023, and 2024 has been a year of reset goals and benchmarks. (For the record: VC funding of proptech and related firms was down more than 14 percent in the first half of 2024, according to the Center for Real Estate Technology & Innovation, which Power Proptech honoree Ashkán Zandieh started.)

What are the new goals and benchmarks? Well, talk to the honorees on this list often enough — and CO does — and you’ll hear that “nice to have” services for commercial real estate owners and operators have been replaced in this new climate by “must-haves.” 

“I think very few proptech companies have scale,” honoree Nick Romito of VTS said. “A lot of them probably should have been features vs. companies. Market corrections have a way of surfacing that.”

In other words, today’s successful proptech firms produce things and software that people actually need to stay competitive. “We try to target companies that, if they can solve the big technical problems, the market is there,” explained another honoree, KP Reddy of VC firm Shadow Ventures. 

Everything else that’s not solution-oriented can wait. And, anyway, these pie-in-the-sky ideas — or approaches that haven’t really been market-tested — will have trouble getting financing. 

Admittedly, that might change as interest rates come down. “Real estate is a highly leveraged asset class, so every reduction in rates will help improve the confidence and performance of real estate operators along with service providers who are the clients of proptech,” said Dealpath’s Mike Sroka, who also made the cut. 

In the meantime, a streamlined and more market-focused proptech industry keeps chugging along behind the ingenuity and — now more than ever — practicality of the people on this list.