After overcoming the pandemic and facing the uncertainty of tariffs, proptech is taking a different turn. It is moving from experiments and anything goes to discipline, a practical view of what customers might need, and “more realism on the part of investors,” Jameson Hartman, vice president at RET Ventures, told GlobeSt.com.
“A lot of the proptech we and others are trying to invest in is mission-critical,” said Hartman, who underwrites potential investments for the firm and works with strategic limited partners. The plethora of specialty software offerings that could attract funding in the past find it much harder now. Customers and investors both want something that offers significant value.
“I do think it comes back to what I would probably say in the proptech world in 2025, you’re seeing a bit of this point solution fatigue, chasing shiny objects,” Hartman said. “I think there has been a back-to-the-basics mentality with the customers. Is this something that will obtain adoption?”
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No one has the time or money for something that offers a slightly better approach to one small part of what a CRE business needs to do, tech that is “fluff.” The effort to integrate limited point packages into a company’s infrastructure is significant. With work to be done, companies must focus on what will help them work more efficiently.
“What we need is not the next shiny object, but the next mule and be a software tool that will live with us for the next 10 or 20 years,” said Hartman. He uses an analogy from earlier years with the iPhone and the App Store. “You had an app for everything. Eventually, a lot of people said Apple is going to design a good, solid app, and it’s going to be included in the phone. I think we’re seeing that in proptech. Everyone is coming back to consolidation. How much change management is it going to be?”
The challenge is meeting customers where they already are with something that can fit in easily. “When we look for something, we go, ‘How much change management is there going to be?’” he says. “We want to improve the workflow; we don’t want to change it radically. Where we’ve seen difficulty is when we put on our customer hat. Is this something I would use as a customer?”
Also, there’s a question of how much money a proptech company could bring in. Hartman asked: “Is this something that will be a multi-billion-dollar company?” If not, making a success out of the business can be too hard because the company might have to get an unrealistically large portion of the market with a product that can’t be priced high enough. And if the company and its product are unlikely to be around in five years, the CRE business doesn’t want to get involved.
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