The additional capital is intended to position the company for long-term growth. News of the transaction came as the company announced the promotion of Katerra’s chief operating officer Paal Kibsgaard to chief executive in a planned transition that will involve him succeeding co-founder Michael Marks.
Founded in 2015, Katerra has built an end-to-end platform that streamlines the design and building process, offering manufactured components that can be configured into thousands of building designs and structural systems, in addition to supply chain, renovation and assembly services. A user will provide details on the kind of building they need and Katerra’s software can then create a basic layout of the prospective structure. It buys materials in bulk to save money, assembles them at its manufacturing facility and then ships them to the building site.
The company has more than 6,000 multi-family units under construction and employs 8,000 staff globally.
Katerra is part of the broader construction tech space, which has enjoyed a somewhat limited attention from corporate investors. We have tracked 10 or fewer deals in previous years and rarely at high valuations. The total estimated capital in rounds registered modest figures in most years, except 2017 and 2018, when it hit $561.5m and $929.5m.
Investing in a construction tech company could be seen as a truly a bold move when many are sceptical of the future of real estate in a post-Covid-19 world and at a time when the Vision Fund expects to register a $16.5bn annual loss. However, given the cyclicality of the construction business this may be a well-calculated longer-term bet.
