Katerra, an offsite construction startup based in Menlo Park, CA, announced that it raised $130 million in a Series C funding round and reached a $1 billion valuation, according to the Silicon Valley Business Journal.
Founded in 2015, Katerra takes orders directly from owners, uses its own software to create a cost-effective layout for the project, acquires the materials, assembles the building components in a factory, ships them to the site and assembles them there. Through this system, the company aims to streamline the design-bid-build process. Katerra is working on multifamily projects in Seattle and Portland, OR.
- Katerra currently focuses on the multifamily sector, but it plans to expand to other segments. The company will invest its latest funding infusion into research and development, production facilities and other general costs for its 550-person team.
Despite being a newcomer to an active and growing market segment, Katerra has so far managed to pull in major investor interest. That is likely due in part to its executive chairman, Michael Marks, who previously served as the CEO of tech manufacturing supply chain platform Flex. Marks told Fortune that he aims to use that logistics knowledge to improve construction. However, some of the company's critics question its ability to effectively take on so many steps of the building process.
Katerra is expanding on an already-common practice in the construction industry — prefabricated or offsite construction — by tackling the related software, design, material acquisition and building of projects. Offsite construction has become an increasingly popular method to control quality and cost by removing potential risk factors that can occur on a job site. Katerra's $1 billion valuation is another sign of the growing acceptance of prefab construction.
Construction startups continue to draw big money, as investors see a largely untapped market in an industry that is finally starting to utilize technology to improve business. Another "unicorn" in the construction tech space, software startup Procore Technologies, achieved a $1 billion valuation in December after completing a $50 million funding round.