Katerra, the US-based construction services provider that had reportedly raised about $2bn from investors including telecommunications and internet group SoftBank, is shutting down, people familiar with the matter told The Information yesterday.
Founded in 2015, Katerra aimed to cut the cost of apartment building through a streamlined model incorporating architecture, materials provision and manufacturing as well as construction.
However, the ongoing coronavirus pandemic has helped increase the cost of materials and employee pay, in turn affecting the company’s bottom line. It has reportedly told employees it cannot pay severance or unpaid leave and is set to leave dozens of projects unfinished.
SoftBank’s Vision Fund 1 invested $200m in Katerra in December 2020 through a deal that gave it a majority share of the company and significantly diluted the stakes held by other investors.
Contract manufacturer Foxconn, Greenoaks Capital, Moore Capital Management, Khosla Ventures, DFJ and Paxion had supplied a total of $220m in funding disclosed by Katerra when it emerged from stealth in 2017 with a $1bn valuation. Unnamed investors added $27.8m the same year.
Katerra then closed a $999m round that included $865m from Vision Fund, real estate developer Divco West, Canada Pension Plan Investment Board, Tavistock Group, Navitas Capital and a fund managed by Soros Fund Management in 2018.
Vision Fund 1 provided $200m for the company in May 2020 while Greensill, the SoftBank-backed financial services provider which has since become insolvent, supplied $435m in debt financing which was converted to a 5% equity stake in December.
