Currently Reading

Katerra Received $2 Billion in Funding—Why Did It Fail?

Building Technology

Katerra Received $2 Billion in Funding—Why Did It Fail?

June 7, 2021
Home-building factory
Photo: Ivan Traimak |

Katerra emerged as one of the largest and most funded prefab and industrialized construction companies out there, yet it wasn’t enough to keep the company afloat. Founded in 2015, Katerra had a goal to merge mass manufacturing with construction for a streamlined process. It received $2.4 billion in funding from SoftBank, a Japanese conglomerate holding company that also funneled more than $13 billion into WeWork. Industrialized construction experts say Katerra likely attempted to do too much too fast, reports Fast Company. Katerra acquired smaller firms and opened up massive and pricey facilities in order to serve more customers, yet may not have fully understood the codes and regulation changes per state.

“They tried to integrate the entire process too rapidly and serve a large geographic territory, not fully understanding that each state treats modular and off-site construction a little differently in terms of codes and regulations,” says Tom Hardiman, executive director of the Modular Building Institute.

An industry group founded in 1983, MBI has been involved in efforts to help prefab and modular builders work their way through regulatory systems that are still figuring out how to deal with factory-based construction. Though still a small segment of the market compared to conventional construction, a recent analysis suggests that prefabricated and modular construction are expected to make up more than 30% of the North American construction market by 2026. Prefab and modular construction are far from unknown quantities, and many companies have been able to survive. Hardiman says that his group represents nearly 500 member companies, “many of which have been successful for decades in this industry.”

In the world of prefabrication and industrialized building, the ventures that seem to struggle are the ones that try to revolutionize the industry by proposing a new approach that can largely replace traditional construction for medium- and large-scale buildings. 

Read More

Related Stories

Off-Site Construction

3D-Printed Communities, Modular Townhomes: Off-Site Construction Projects Happening Across the Country

Off-site construction methods are nothing new, but new advancements and upcoming housing projects hint at a tech-forward future. Pair that with…

Building Technology

Construction’s New Normal After the Pandemic

8 areas and functions that are ripe for building with technology after the pandemic

Modular Homes

Four Lessons Van Metre Learned from its First Modular Home

The next step for Van Metre is to build four townhomes together, which will provide a better scale to figure out the cost components.


More in Category


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.