Prefab construction startups have raised US$1.5 billion since January as builders struggle to meet demand.
According to a Cruchbase report, high material costs and skilled labour shortages in the United States have led to renewed enthusiasm for prefab construction startups,
The report, published last week, said that residential construction startups have raised more in the opening months of this year than they did over the entire span of 2020. Roughly US$1.5 billion has flowed into these startups since the start of 2021, Crunchbase found.
Even as Katerra has now officially filed for bankruptcy protection, it hasn’t dampened investors enthusiasm for tech-based prefab startups that are taking alternate ‘pathways’ to prefabrication.
The largest amount went to Prescient, which raised US$190 million in May to fund its digital design and prefabricated manufacturing business.
Another prefab startup, Veev, received nearly US$100 million in March from alternative funding platform, Tase Up, launched by the Tel Aviv Stock Exchange; like Prescient, this developer specialises in prefabricated structures.
Some developers are looking not just toward building homes on undeveloped lots, but also toward starting to replace the ageing buildings of America’s older neighbourhoods, Veev’s CEO Amit Haller said in the report.
“Not only do we have so much to catch up, we have so much to rebuild,” Haller told Crunchbase. “That means one thing: it’s a nonlinear problem. This problem requires a lot of disruption in construction.”
Haller further told Crunchbase that his company has not been significantly impacted by skyrocketing prices of material goods. Instead of lumber and drywall, Veev (prefab startup) largely builds with steel and other materials.
See: https://www.crunchbase.com/lists/recently-funded-construction-startups/
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