The State of Proptech in Mexico
The State of PropTech in Mexico: Where Are We and Where Should We Go?
An overview of the PropTech startup ecosystem in Mexico and LATAM. The publication includes the following takeaways:
An Overview of PropTech Startups
- To date there are 12 latin american unicorns. Quinto Andar is the first latin american PropTech startup with unicorn status.
- The main PropTech hubs in LATAM are in Mexico, Brazil, Argentina, and Chile.
- In LATAM, 53 percent of PropTech startups focus on commercial real estate, 45 percent focus on residential real estate, and 2 percent focus on retail real estate.
- In 2019, the PropTech industry in LATAM accounted for 7 percent of the deals made and 9 percent of the invested quantity.
- From 2016 to date, investments in latin american PropTech startups totaled USD 759 million. It was the eighth industry that received the most investment in the region.
Real Estate Challenges in LATAM
- Real estate agents don’t have exclusivity rights.
- Many real estate brokers are not licensed or certified.
- People need to use notaries.
- Very few Multiple Listing Services (MLS).
- Extremely high mortgage rates are a problem across LATAM.
- Complicated real estate-related processes for foreigners.
A Framework for Understanding the State of PropTech in Mexico
- Beginning with Big Data, a state-of-the-art PropTech ecosystem is able to achieve the effective gathering and analysis of data for the identification of buying, selling, and renting trends for specific areas and demographics.
- With respect to AI & Machine Learning, they are mainly needed to transform all the data collection efforts into actionable insights.
- PropTech startups are using Virtual and Augmented Reality that allow physically distant buyers to experience the property as vividly as possible.
- IoT, allows for the monitoring, maintenance, and resource efficiency in any kind of property.
PropTech Startups in Mexico: Where are we?
- The most widely used technology by Mexican PropTech startups is the Digital Platform.
- The most used business model by the startups that use Digital Platforms is the Marketplace.
- The majority of PropTech startups in Mexico are Digital Platforms that function as a marketplace for buying, selling, or renting real estate.
- While each day more mexican PropTech startups start incorporating Big Data technologies in their business models, they still only account for 18 percent of the PropTech startups in the country. That can’t be said of the most promising technologies like AI and Blockchain, each only accounting for 2 percent of the total number of PropTech startups. There is undoubtedly space for many more startups to use these technologies in their business models.
- The real estate market is still in a phase where it’s consolidating itself by structuring all the property data available and using it to power its sites.
Credits: David T. Sánchez, Luis Miguel Almanza Rueda, Itzel Pamela Becerril Tovar, Gabriel García Nevárez, Rodrigo Alejandro Ibarra Vizcarra, Ilian Murillo Palma, Priscila Elizabeth Terrazas Rico, Karla Susana Olvera Vázquez, Ivan Elias Castro Cordero.