As artificial intelligence continues to dominate proptech headlines, the sector’s next wave of investment may be taking shape in a less obvious place.
According to Ashkán Zandieh, president and head of platform at the Center for Real Estate Technology & Innovation (CRETI), capital is increasingly flowing not into standalone AI platforms, but into the financial and infrastructure layers surrounding housing, including mortgages, insurance, utilities and other “adjacent” services.
The shift reflects a recalibration in proptech after the funding surge of 2020 and 2021, when venture dollars flooded into software platforms promising to digitize real estate workflows. While AI remains a central theme, Zandieh said investors are becoming more disciplined about where and how they deploy capital.
Capital flows follow utility, not hype
A closer look at recent funding rounds reveals a shift not just in what investors are backing, but also in where those companies are based and what they actually do.
“There’s a certain sense of geography that’s important,” Zandieh told Inman, pointing to a growing number of large raises happening outside the traditional U.S. proptech core.
One example is India-based Weaver, which Zandieh said recently raised roughly $156 million in venture funding. Despite the scale of the round, the company is not positioning itself as an AI platform. Instead, it operates as a debt services provider, a category that Zandieh says is attracting growing investor interest.
In the U.S., companies like San Francisco-based Span are attracting similar attention. The company recently reached unicorn status after raising more than $163 million in its latest round, bringing total funding to nearly $400 million since its founding in 2018. Span focuses on smart electrical panels and electric vehicle charging for homes, products that blend hardware with software and, in some cases, AI. That combination is key.
“AI, for the sake of AI, is no longer the case,” Zandieh said. “There have to be specific use cases.”
Rather than backing standalone AI tools, investors are gravitating toward companies that integrate technology into essential home systems. Zandieh pointed to firms like Span and Base Power, a home battery startup, as examples of this trend — businesses that operate in utility-like categories and layer software or AI on top of physical infrastructure.
The same pattern is emerging in construction. Zandieh highlighted companies focused on off-site building and materials innovation, including firms in Scandinavia, as areas where capital is beginning to concentrate.
Across the board, many of the largest funding rounds are flowing into what he describes as “asset-heavy, utility-based adjacencies.” These are sectors tied directly to how housing is built, powered and financed.
‘Cash flow is still king’
That doesn’t mean AI has disappeared from the investment landscape. But Zandieh said the industry has reached a point of saturation, where simply branding a company as AI-driven is no longer enough to attract capital.
“AI has been so overhyped in our industry,” he said, noting that some startups are leaning on the label primarily to raise money. “But cash flow is still king, and you’re starting to see valuations represent that.”
That shift is especially apparent at the growth stage. For startups seeking a Series A round, expectations have risen sharply.
“If you’re an AI company and you’re trying to raise your A-round, but your pipe is $10 million and your average contract is $10,000, you’re not raising,” Zandieh said.
Policy could accelerate the trend
Looking ahead, Zandieh said housing policy could play a significant role in shaping where capital flows next. The Senate’s passage of the bipartisan 21st Century ROAD to Housing Act marks one of the most significant federal housing policy shifts in years, and its impact may extend beyond affordability into venture capital.
The bill still faces a significant hurdle in the House, where it is drawing resistance. Some House Republicans have pushed back on several provisions, including a requirement that large institutional investors divest their build-to-rent single-family portfolios within seven years.
Designed to ease regulatory barriers, expand financing tools and spur local housing production, the bill, if passed, could unlock new development activity, particularly in markets constrained by zoning, permitting delays and limited capital.
For proptech investors, that shift could open new opportunities across development-focused technologies — from construction and permitting platforms to financing infrastructure — as improved project economics drive demand.
“The moment there’s legislation that could increase the volume of housing, you look at the benefactors of those industries,” Zandieh said. “They’re all in the adjacencies.”
