Venture Capital Is Back in Proptech and Picking Winners Based on AI Integration

A recent analysis by the Center for Real Estate Technology & Innovation (CRETI) shows a decisive shift in real estate technology: Artificial intelligence has become the organizing principle of venture capital allocation across commercial real estate.

Year-to-date 2025, global proptech companies have raised $11.5 billion, surpassing 2024’s $9.9 billion and edging past 2023’s $11 billion. The composition of that capital is changing just as quickly. The share directed to AI-focused companies has expanded from roughly 20 percent in 2024 to an estimated 30 to 50 percent in 2025, reflecting investor preference for products tied to measurable operational and financial outcomes.

Investor activity is consolidating around platforms with defensible data rights, established distribution and clear impact on net operating income and internal rate of return. CRETI tracking indicates a growing proportion of growth capital flowing into multifamily and property operations, where AI most directly addresses the industry’s persistent inefficiencies in leasing, collections and expense control.

Notable 2025 deal sizes include raises above $200 million for operating-system providers and $40 million to $60 million in midmarket financings for building optimization, workflow automation and financial reconciliation. Seed and early-stage rounds remain smaller, generally $5 million to $10 million, and face tighter scrutiny around distribution, data rights and line-of-sight to profitability.

The historical friction between property-level execution and asset-level budget control continues to shape how AI is adopted across CRE. CRETI’s data shows multifamily, construction technology, insurability, mortgage, office and retail as distinct, but converging, lanes of AI investment.

In multifamily, AI-enabled leasing, rent roll reconciliation and delinquency management platforms are scaling, reducing manual errors and freeing managerial bandwidth. In construction, predictive analytics and jobsite safety technologies are drawing growth capital as developers and insurers prioritize risk mitigation. Within insurability, underwriting platforms that model climate, maintenance and tenant risk are emerging as high-priority targets. 

In the mortgage space, AI-driven origination, underwriting and servicing tools are attracting investors for their ability to compress cycle times and improve credit performance. Office and retail owners are adopting AI for space utilization, energy optimization, and tenant-retention analytics, critical levers for stabilizing occupancy and protecting asset value.

CRETI’s analysis underscores a widening divide between AI-native platforms, built around machine learning and proprietary data pipelines, and retrofit solutions that bolt AI onto legacy software. That divide has become a key determinant of funding outcomes.

The result is a two-tier market: Scaled platforms with durable data and distribution attract the bulk of growth-stage capital, while undifferentiated entrants struggle to progress beyond seed. This dynamic is fueling a steady cadence of consolidation, as established players extend their lead and smaller firms face acquisition or attrition.

Market sentiment, as reflected in CRETI’s executive dialogues, is cautious optimism. Investors and operators characterize AI as “essential,” “accelerating,” and “early in integration.” The consensus view: Adoption is no longer optional — it is central to operating efficiency, compliance accuracy and valuation.

For brokers and real estate executives, AI-driven underwriting, market intelligence and valuation tools are transforming how opportunities are identified, analyzed and transacted. From predictive rent and cap rate modeling to automated comp analysis and buyer targeting, AI now underpins the speed, precision and certainty of deal-making. Firms leveraging these systems are compressing underwriting timelines, reducing pricing discrepancies, and improving client execution — giving brokers and owners a distinct competitive edge in an increasingly data-efficient market.

CRETI’s findings point to a market in its next phase of maturity: Capital is back, but it is picking winners faster. Organizations that integrate AI into core operations today will capture enduring performance advantages. Those who delay risk structural disadvantages in a market where precision, efficiency and scalability are no longer negotiable.

Ashkán Zandieh is the founder and managing director at the Center for Real Estate Technology & Innovation.