HDFC Capital secures over Rs 500 crore in first close of proptech fund

By Consultants Review Team Tuesday, 20 September 2022


HDFC Capital Advisors, a subsidiary of India’s largest private mortgage lender HDFC, has raised over Rs 500 crore as the first close of its property technology fund through global investors for investments into start-ups that drive innovation and efficiencies within the affordable housing ecosystem, said persons with direct knowledge of the development.

Through its initiative, HDFC Affordable Real Estate and Technology Program (HeART), it is looking to provide a platform to real estate technology companies with innovative products that would create competences and lower costs in each phase of the development cycle of a real estate project.

The HDFC Group entity has already made a few investments including HomeExchange, Loyalie and has already committed to more than 15 investments in proptech companies operating in India.

As part of this initiative, HDFC Capital is soon launching the HDFC Tech innovators program in partnership with the government of India, other leading global and Indian funds, academia, and industry associations to identify the most innovative proptech companies. This will be an ongoing initiative in the quest to identify and partner with innovative technology companies in the affordable housing segment.

“HDFC Capital seeks to address the demand-supply gap in affordable housing in India through a combination of financing, partnerships and technology… We look forward to bringing together multiple stakeholders, including developers, consultants, construction companies, global institutions, venture funds, incubators and accelerators,” Vipul Roongta, MD & CEO, HDFC Capital Advisors, had told ET in an earlier interaction in 2019.

ET’s email query on Monday with regards to the fund’s first close remained unanswered until the time of going to press.

A key challenge faced by technology companies operating in the real estate sector is lack of scale and access to the right partner developers. In addition to financing, HDFC Capital is looking to create an industry-wide ecosystem including stakeholders from the government, academia, developers, private equity and venture capital funds to prompt policy initiatives.

It will also partner with accelerators and tie up with academic institutions to further the ideas related to enhancing housing development. The HDFC subsidiary is also likely to tie up with international funds to explore synergies and provide global context to Indian real estate innovations.

HDFC Capital will also tie up with established companies creating solutions for real estate and help them access the market through its real estate investee companies.

HDFC Capital, set up in 2016, is the investment manager to HDFC Capital Affordable Real Estate Funds 1, 2 and 3; and is aligned with the government’s goal to increase housing supply and support the Pradhan Mantri Awas Yojana -‘Housing for All’ initiative.

It manages a $3 billion funding platform that has been rated as one of the world’s largest private finance platforms focused on development of affordable housing. The funds managed by HDFC Capital provide long-term, flexible funding across the lifecycle of affordable and mid-income housing projects including early-stage funding.

HDFC Capital’s target is to finance the development of one million affordable homes in India through a combination of innovative financing, partnerships and technology, while focusing on sustainability.

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