Challenges and Cooperations in the German PropTech Market - Evidence Based on Results from the PropTech Germany 2020/2021 Surveys

PropTechs are external drivers of digitalisation in the real estate industry. Offering mostly innovative digital solutions, they are moving into the market with high speed, but struggeling with challenges or even market entry barriers. There is a lack of systematic approaches to transparency in key market characteristics and figures of the growing German proptech sector, meanwhile being classified as a subsector of the real estate industry. The majority of available surveys and studies on digital transformation and digitalisation analyses or emphasises the view of the traditional real estate sector. PropTechs' perspectives and their challenges are under-represented. This paper aims at closing this gap. Using two proptech surveys from 2020 (explorative, interview-based) and 2021 (descriptive, questionnaire-based with 185 proptech respondents), the authors classify proptechs by their degree of maturity. Applying factor analysis, they identify major challenges for these proptech clusters throughout their sales cycle, when faced with the real estate industry as customer. Further, the paper will elaborate on drivers and models of horizontal and vertical cooperations between proptechs and real estate companies. Finally, the authors reflect on recommendations for a sustainable digital transformation of the German real estate industry, integration both proptechs and real estate companies in a common ecosystem.