SoftBank Continues Funding Spree, Leads $865M Round for Katerra

Katerra, a building construction startup inspired by the efficient practices of electronics manufacturing, announced today it has raised $865 million in a Series D fundraising round led by the SoftBank Vision Fund.

The company was co-founded in 2015 by Michael Marks, the former CEO of contract electronics manufacturer Flextronics. Katerra has large-scale ambitions that match the goals of the huge Vision Fund, which announced in May that it had scored investor commitments of $93 billion on the way to its targeted $100 billion. The Vision Fund was initiated by Japanese telecommunications giant SoftBank Group to make major global investments in “the next stage of the Information Revolution.”

SoftBank has been investing heavily in U.S. tech and healthcare companies. Its recent deals include big funding rounds for Uber, WeWork, and Roivant Sciences.

In less than three years since its founding, Katerra has now raised a total of $1.1 billion. The Menlo Park, CA-based company aims to transform the methods of the $12 trillion global construction industry by streamlining processes and eliminating inefficiencies by using its software platform and supply chain innovations. With a team of more than 1,300 people, Katerra offers to cover all stages of building projects, including design, architecture, supply, and construction.

The company makes its own standardized construction materials—wall panels, door frames, and so forth—at a factory in Phoenix, AZ. The company is also starting to bring its lumber supply in-house, according to its announcement today. It says it has broken ground on a large timber factory in Spokane, WA.

Katerra is currently focused on multi-family residential construction. Its projects are concentrated in the western United States, in California, Oregon, Washington, Nevada, and Idaho. Its long-term plan is to expand across the country, and eventually, to regions outside the United States.

The startup’s new money will be devoted to manufacturing expansions and R&D investments. Joining SoftBank Vision Fund in the big funding round were new investors including Canada Pension Plan Investment Board (CPPIB); a private investment fund managed by Soros Fund Management LLC; Tavistock Group; Navitas Capital; and DivcoWest. Katerra’s previous investors include Foxconn; Greenoaks Capital; DFJ Growth; Khosla Ventures; and Louis M. Bacon, the founder of Moore Capital Management, LP.

Jeffrey Housenbold, managing partner for SoftBank Investment Advisers, will join Katerra’s board. Housenbold, in a written statement, said Marks and his team are poised to bring productivity gains to a fragmented industry that now uses “minimal levels of technology.”

“Drawing on his experience leading Flextronics, Michael’s unique vision and talented team are taking the great lessons of electronic manufacturing and applying them to an industry that is in dire need of change,” Housenbold wrote. “We are excited to support Katerra as they expand across markets and geographies and unleash a new wave of productivity.”

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