(Bloomberg) -- WeWork's spectacular decline last year has dented investor confidence in the property-technology industry, according to a new survey.
Only 45% of so-called proptech investors said they plan to make more investments in 2020 than in 2019, down from a high of 64% in the middle of last year.
Co-working startup WeWork's failed initial public offering helped the industry become more realistic about what works as a business model, said Aaron Block, co-founder of MetaProp NYC LLC, a New York-based venture capital firm focused on real estate technology, which produced the survey with the Real Estate Board of New York and the Royal Institution of Chartered Surveyors. Overall investor confidence, however, was higher at the end of 2019 than at the end of 2018.
The proptech industry became the latest buzzword and investment niche a few years ago. The category includes everything from building management technology, such as sensors to capture real-time data on temperature changes, to platforms such as Opendoor, which uses computer algorithms to buy and sell homes over an app.
Investors are likely to shift away from asset-heavy companies like WeWork, which had an innovative business model but imploded in part over huge losses and no clear plan to profit, and focus more sharply on technological innovations that can disrupt the real estate industry, according to Block.
Startups still remain confident about raising funds, with 81% expecting it to be easier or about the same as in 2019 to raise venture capital in 2020.
Meanwhile, WeWork parent We Co. is remaking its management team and trying to salvage the situation. In the last week, the company appointed a new chief executive officer and added the first woman to its board, SoftBank Group Corp.'s Kirthiga Reddy.
To contact the reporter on this story: Nikitha Sattiraju in New York at nsattiraju@bloomberg.net
To contact the editor responsible for this story: Molly Schuetz at mschuetz9@bloomberg.net
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