Proptech investment trends are moving beyond AI, with capital flowing into the core financial infrastructure of mortgages, insurance, utilities, and housing.
As artificial intelligence continues to dominate proptech headlines, the sector’s next wave of investment may be taking shape in less obvious places.
According to Ashkán Zandieh, president and head of platform at the Center for Real Estate Technology & Innovation (CRETI), capital is increasingly flowing into the financial and infrastructure layers surrounding the home, including mortgages, insurance, utilities, and other “adjacent” services, rather than standalone AI platforms.
The change reflects a realignment in proptech after a surge in funding in 2020 and 2021 that saw an influx of venture capital into software platforms that promised to digitize real estate workflows. Zandier said that while AI remains a central theme, investors are becoming more disciplined about where and how they put their money.
Capital flows follow practicality, not hype.
A closer look at recent funding rounds shows changes not only in what investors are backing, but also in the locations and activities of those companies.
“There’s an important geographic sense,” Zandier told Inman, noting that large pay increases are occurring outside of the traditional proptech core in the United States.
One example is India-based Weaver, which recently raised about $156 million in venture funding, Zandier said. Despite the size of the round, the company is not positioning itself as an AI platform. Instead, the company operates as a debt service provider, a category that Zandier says is gaining increasing interest from investors.
In the United States, companies like San Francisco-based Span are attracting similar attention. The company recently reached unicorn status with its latest round of funding of more than $163 million, bringing its total funding since its founding in 2018 to nearly $400 million. Span focuses on smart electrical panels for the home and electric vehicle charging, products that combine hardware, software and, in some cases, AI. That combination is the key.
“AI for AI’s sake is no longer about that,” Zandier says. “I need a specific use case.”
Rather than backing standalone AI tools, investors are attracted to companies that integrate technology into essential home systems. Zandier pointed to companies like home battery startup Span and Base Power, companies that operate in categories like utilities and layer software and AI on top of physical infrastructure, as examples of this trend.
The same pattern is emerging on construction sites. Zandier highlighted companies focused on off-site construction and materials innovation, such as Scandinavian companies, as areas where capital is starting to concentrate.
Overall, many of the larger funding rounds are going to what he describes as “asset-heavy, utility-based adjacencies.” These are sectors directly related to how housing is constructed, powered and financed.
“Cash flow is still important.”
That doesn’t mean AI has disappeared from the investment world. But Zandier said the industry has reached a saturation point and branding a company as AI-driven is no longer enough to attract capital.
“AI is overrated in our industry,” he said, noting that some startups rely on the label primarily to raise capital. “But we’re starting to see that cash flow is still important and valuations represent that.”
The changes are especially noticeable during the growth stage. For startups seeking Series A rounds, expectations are skyrocketing.
“If you’re an AI company and you’re trying to raise an A round and your pipe is $10 million and your average contract is $10,000, you’re not going to raise it,” Zandier says.
Policies could accelerate this trend
Looking ahead, Zandier said housing policy could play a key role in shaping the next flow of capital. The Senate’s passage of the bipartisan 21st Century ROAD to Housing Act marks one of the most important shifts in federal housing policy in years, with implications that could extend beyond affordability to venture capital.
The bill still faces major hurdles in the House and is drawing resistance. Some House Republicans oppose some provisions, including a requirement that large institutional investors sell their portfolios of single-family homes within seven years.
Aimed at lowering regulatory barriers, expanding financing options, and encouraging local housing production, the bill, if passed, could enable new development activity, especially in markets constrained by zoning and subject to delays and limited capital.
For proptech investors, this shift could lead to new opportunities across development-focused technologies, from construction and permitting platforms to financing infrastructure, as improved project economics drive demand.
“The moment you enact a law that could increase the amount of housing, you focus on the people who benefited from those industries,” Zandier said. “They’re all adjacent.”
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