Japanese company SoftBank plans to make another $700 million investment in California-based Katerra, a construction tech startup aiming to disrupt the $10 trillion industry.
The new investment from SoftBank?s Vision Fund will put the builder?s valuation at $4 billion with total equity of nearly $2 billion, making it among the fund’s top U.S. investments after WeWork and Uber.
Co-founded by former private equity tech veterans Michael Marks and Jim Davidson, and real estate developer Fritz Wolff, the construction tech startup received $865 million from SoftBank in early 2018 after the company reported a pipeline of more than $1.3 billion in new construction projects.
Katerra?s revenues are expected to surpass $2 billion in 2019 according to reports.
The company?s business includes selling vertically integrated end-to-end construction services such as design, materials procurement, manufacturing and construction, building supplies and components and home renovation services to large developers.
Katerra announced a merger with KEF Infra, an off-site manufacturing technology specialists, in June last year and has been aggressively expanding in the Middle East and Indian markets.
KEF Infra utilizes robotics and automation in advanced manufacturing operations to deliver high-quality building components more quickly and efficiently through its expertise in factory-made products such as pre-cast concrete, prefabricated bathroom pods, joinery and other building products for facades in the Indian and Middle East markets.
High labor costs and regulation have been major causes a slow innovation in the industry a trend which has changed dramatically in the past 18 months. ?
As more startups aim to solve long-standing pain points, the industry is poised for voluminous growth and innovation.
Construction tech market poised for tremendous growth
A new report by Global Construction Perspectives and Oxford Economics?found that the volume of construction output will grow by 85% to $15.5 trillion worldwide by 2030, with China, the U.S. and India together accounting for 57% of all global growth and outpacing the average global GDP by four nearly times.
SoftBank?s investment in Katerra underscores the tremendous opportunity for growth in the construction industry which despite being a $10 trillion yearly global market has remained one of the least digitized according to analysts. ?
SoftBank?s continued interest in funding innovation in the property sector with hefty investments in WeWork, Compass and Opendoor also demonstrates the massive opportunity for transformation.
Other plays in construction tech included a massive $1.1 billion investment by Autodesk which acquired two construction startups BuildingConnected and PlanGrid last month.
According to The information which originally broke this story, spokesmen for Katerra and SoftBank declined to comment on the investment.
