Why proptech became an inclusivity bright spot

Female-run firms could signal a change for lagging real estate industry

March 08, 2024

When it comes to advancing female representation in real estate, women in proptech are one bright spot.

Female-founded proptech firms broke records after receiving $1.5 billion worth of investment – an all-time high for women in the sector, according to the Center for Real Estate Technology and Innovation.

The shift comes as investors bet on women-led companies who deal with everything from automated property management to innovative platforms for maintenance or rental listings.

“More flexible working options, the increased adoption of AI, and lower overall costs of market entry, are combining to help level the playing field for a more diverse swathe of founders,” says Ajey Kaushal, Venture Capital Investor at JLL Spark Global Ventures, JLL's corporate venture arm.

However, proptech remains an outlier in commercial real estate as a whole, with change in the industry still slow to materialize.

Women own and manage less than 3% of commercial real estate. They hold just 9% of C-suite positions at real estate firms. Female founded or co-founded real estate companies represent just 2% of the $3.2 trillion of private capital raised, according to PERE data, while an Association of Investment Companies (AIC) study found just 6% of fund managers are women.

Yet a bumper year for female involvement in proptech may signal a new approach from investors.

“Greater societal and shareholder expectations, plus ESG regulations and reporting requirements are all piling on the pressure to act,” says Anne-Lyse Raoul, Head of DEI for JLL EMEA. “It means inclusivity is rising up investment agendas.”


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Inclusive strategies make good business sense

Female-owned businesses are a significant and growing segment of the economy, yet they continue to face barriers in accessing capital and suitable commercial spaces.

“It’s why female investors often choose to support women-led projects, recognizing the challenges they’re up against,” says Raoul.

The U.S. Trust found 71% of high-net-worth women prioritize giving back to society when making investment decisions, compared to 55% of high-net-worth men.

By using tech for data-driven decisions and aligning offerings with these new socially responsible sources of capital, investment fund managers can help build a more inclusive real estate landscape.

Regardless of gender, all investors can play a role in actively supporting initiatives that promote women's entrepreneurship and diversity in leadership development, says Raoul. She says this may include providing access to flexible financing options, mentorship programs, and networking opportunities tailored to the needs of female entrepreneurs and business leaders.

When it comes to diversity in leadership, the benefits are well documented. Take the findings of global asset manager BlackRock, which examined a decade of real estate lending data and found firms with an equal gender split outperformed less diverse firms by as much as 29%.

Kaushal points out that the built environment serves the entire population. Greater inclusion is not just the right thing to do, but also makes sound financial sense.

“Female and minority led companies are outcompeting others by creating innovative solutions that better connect to their broad stakeholder base,” he says. “This much-needed diversity of perspective has frankly been missing and we must continue encouraging smart, motivated people across a wide range of backgrounds to join the real estate and tech sectors.” 

How tech could boost inclusion

Data scraped from digital platforms such as social media and crowdfunding sites is starting to help uncover hidden opportunities, connecting more diverse entrepreneurs with potential investors.

Raoul says using tech to source data from less traditional channels, helps prevent marginalized groups, like black or neurodiverse women, from being overlooked.

Analytics tools and financial risk management software can identify market trends and indicators that help investors better understand potential when weighing risk versus reward.

And while artificial intelligence hasn’t yet perfected how to weed out bias, let alone promote diversity, AI tools are being used to provide actionable data and insights for groups that are looking to make a step change.

It’s the first step towards a more inclusive approach that could give women a better shot at securing future funding.

“AI in particular is helping identify, score and screen opportunities that align with new investor criteria and priorities,” says Vivian Le, Head of Quants for JLL EMEA Capital Markets.

“Technology is continuing to improve our ability to sift through vast amounts of information and match capital with opportunities that may not have been obvious before.”

Contact Anne-Lyse Raoul


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