Understanding PropTechs and IoT ecosystems – a business model taxonomy for Smart Building technology and service start-ups

The real estate industry faces significant challenges and profound structural change. The digitalisation of buildings into smart buildings, particularly through the influence of PropTechs, presents an opportunity to address sustainability issues, optimise processes and transform the user experience in buildings. Despite growing interest in PropTechs and smart buildings from both a practical and a scientific perspective, they remain relatively undeveloped areas of research. In order to gain insight into the business models of PropTechs and their contribution to the development of smart buildings, a taxonomy has been developed to capture the business model of PropTechs that offer solutions for smart built environment. This taxonomy has been developed through a systematic literature review, 90 real-world cases from Germany, Austria and Switzerland, and 14 expert interviews. In order to identify archetypes, a further 100 PropTechs from Western Europe were sourced using Large Language Model. Following this, they were classified using the taxonomy, after which a cluster analysis was performed. The taxonomy provides academics with a structured method of analysing PropTechs operating in the specific field of smart buildings, facilitating a deeper understanding of this area. In practice, the taxonomy can be used by building owners and investors to analyse the market and gain insight into the functionality and business model of different PropTechs.