In Proptech, Seed Is the New Series A — But Only in Vertical AI

A recent analysis by the Center for Real Estate Technology & Innovation (CRETI) reveals a structural shift in venture capital deployment: Seed rounds, particularly in sectors driven by artificial intelligence, have effectively become the new Series A, especially in vertical AI categories like real estate, construction and infrastructure, where enterprise adoption and data moats matter more than horizontal hype.

In 2025, global early-stage AI companies in real estate, construction and infrastructure have collectively raised an estimated $2.7 billion, representing a 42 percent increase year-over-year. The composition of those rounds has changed dramatically. Median seed financings now range between $5 million and $10 million, with institutional investors leading the majority of transactions once reserved for traditional Series A rounds, but doing so with greater pricing discipline than in horizontal AI, where expectations of $10 billion-plus outcomes often drive valuations.

Carta’s State of Private Markets data supports this trend. The median seed round across AI sectors reached $3.2 million in the second quarter of 2025, with valuations averaging $20 million, nearly double the 2022 benchmark. The step-up multiple between seed and Series A has compressed from 4.9x to 2.8x, confirming what many investors have observed anecdotally: Early-stage value creation is now front-loaded. These higher early-stage valuations are only sustainable in vertical AI when seed pricing leaves room for downstream rounds. This dynamic is crucial in categories where exit outcomes are meaningful but not unlimited. Miscalibrating the first institutional check can be “impossible to correct” in markets where exits in the $500 million to $1 billion to $2 billion range are attractive but finite.

Investor activity is consolidating around AI platforms with strong data infrastructure, defensible intellectual property, and immediate operational impact. CRETI tracking indicates a significant share of this capital is flowing into multifamily operations, underwriting automation, and portfolio analytics — areas where AI demonstrably enhances net operating income and asset-level performance, and where before-and-after cost structures make return on investment straightforward to prove in pilots and enterprise rollouts.

The redefinition of early-stage capital has also altered investor behavior. Institutional venture and private equity firms that previously entered at Series A are moving downstream, participating earlier to secure exposure to data-rich platforms. These funds are underwriting technical defensibility, not just product-market fit, and often require enterprise validation, contracts, integrations and recurring data pipelines, before a company even reaches Series A. 

Sector-focused investors are also explicitly calibrating seed pricing so that future Series B and growth rounds can clear with attractive return profiles, rather than indexing off horizontal AI comps that the built world cannot support.

Seed rounds are no longer experimental. They are designed to prove scalability, not viability. Founders are raising capital to build production-ready systems, deploy AI agents across live portfolios, and validate model accuracy with measurable returns. Carta data shows that one in three seed financings in 2025 now includes at least one institutional co-lead, reflecting how “early” has become synonymous with “strategic,” and underscoring that vertical AI seeds increasingly look and feel like classical Series A rounds in terms of diligence, expectations and board composition.

Within proptech, this shift has profound implications. AI-enabled leasing audit and rent roll reconciliation platforms — once niche pilot projects — are now absorbing the bulk of early capital as owners demand automation that directly improves net operating income. In construction, predictive analytics and scheduling models are capturing early-stage interest from both venture and corporate investors focused on labor and materials efficiency. 

Meanwhile, underwriting intelligence platforms in insurance and mortgage are gaining momentum for their ability to shorten risk evaluation cycles and improve credit precision, with investors favoring teams that can embed deeply into existing systems rather than offering generic AI overlays.

The pattern is consistent: Data advantage and distribution leverage are determining funding outcomes. Startups that can integrate directly into operating systems or leverage proprietary data sets are raising larger rounds with stronger investor syndicates. Those offering generalized or retrofit AI layers are finding it harder to progress beyond seed. Vertical AI is creating a “two-speed” market in which companies that truly own workflows and data compound quickly, while others stall despite strong narratives.

This divergence has created a bifurcated market. A limited set of AI-native platforms — those with real-world deployment and recurring data loops — are commanding high valuations and sustained follow-on support. The rest face slower raises, flat valuations, or acquisition by incumbents with deeper distribution. In many cases, sector-focused investors are winning competitive processes against generalist firms not by paying more, but by offering sharper underwriting, clearer expectations around total addressable market and exit outcomes, and practical help navigating enterprise sales and integrations.

CRETI’s ongoing tracking of venture behavior across proptech and AI underscores this acceleration. Capital is back, but it’s disciplined. Investors are funding fewer companies, writing larger checks, and expecting data-driven accountability from day one. Vertical AI companies in the built world are growing quickly, but they are still subject to enterprise adoption cycles, procurement reviews, and integration timelines, rather than frictionless credit card onboarding.

The implications are profound for real estate. The industry’s next wave of technology adoption will be shaped by companies that raised seed rounds with the rigor of Series A. They are not pitching experiments. Instead, they are building operating systems for asset performance.

What the early stage meant 10 years ago no longer applies. The future leaders of property and capital markets are being built now, in rounds once dismissed as “seed.” The investors who recognize that shift, and the founders who meet its demands, will define the next decade of real estate innovation.

Ashkán Zandieh is the founder and managing director at the Center for Real Estate Technology & Innovation. Gavin Myers is the managing partner at Prudence, an early-stage venture firm investing in property-focused technology companies.