Introduction to Mexico’s PropTech Landscape
The Mexican PropTech ecosystem is undergoing a transformation to survive the scarcity of investment in recent years. In a challenging environment marked by investor caution and pressure to show quick results, startups in the sector see collaboration with public and private organizations as an opportunity not only to innovate but also to demonstrate real value.
Growth Projections for PropTech in Latin America
According to Statista data and recent market analyses, the PropTech sector in Latin America is projected to grow at an annual rate of 30% over the next five years.
Current State and Potential of Mexico’s PropTech Sector
Currently, there are around 150 firms operating in Mexico. However, Ruben Frattini, founder of PropTech Latam, states that the country has the potential to support at least 500 startups. The main obstacle is a temporary issue, prompting the industry to explore new avenues for expansion.
“It has been difficult for PropTech due to the lack of funds. There is a lot of disappointment from investors, who demand excessive returns from startups that may not be able to deliver. Although they are not receiving much capital now, there is an interesting opportunity in traditional companies, private entities, and universities looking to boost the sector,” Frattini explained in an interview.
Startups as Key Partners
As part of its model to drive technology in the real estate sector, PropTech Latam collaborates with public and private organizations such as the Tecnológico de Monterrey, Banorte, Daikin, and government entities to create links that improve their operations and promote the digitalization of the industry.
In these types of alliances, PropTech startups act as technological arms for innovation, improvement, and process agility. For instance, Daikin has invested nearly $1 million in its innovation lab and currently collaborates with over a dozen startups.
Another example is Vinte, led by Sergio Leal, which has sought to strengthen itself through platforms such as Mobel, iVentas, Homie, and Xante – its PropTech specializing in the sale of used homes.
“We see a restructuring of investment. PropTech finally understands that they can’t just wait for someone to bring a big check. If they don’t secure funding, they need to go out and find clients. This is positive because their growth will be genuine,” Frattini stated.
Public Sector Support
According to Frattini, beyond regulation, the PropTech ecosystem requires a serious commitment from the public sector that includes technology education at various levels and incentives for traditional companies that strive to incorporate innovation, such as improving construction materials or enhancing the quality of real estate properties.
“We have spoken with representatives from the Secretaría de Economía; Mexico intends to boost the startup sector, but there needs to be more educational capacity, bringing academia closer, and finding a balance between how the government promotes and rewards technology use,” Frattini emphasized.
While progress has been made, Frattini noted that the real estate industry still lacks maturity to understand that their activities involve much more than just building homes; technology can create a distinctive environment.
