Katerra, a US-based technology-enabled construction company, announced on 30th December 2020 that SoftBank has invested US$ 200M which will enable the company to enhance its financial foundation. This is coming on top of roughly US$ 2 billion that the Japanese technology conglomerate had already committed to the firm.
This funding from SoftBank’s Vision Fund 1 will save Katerra from bankruptcy. Along with the investment, SoftBank-financed financial services firm, Greensill Capital, will be cancelling around US$ 435 million in debt as an exchange for a 5% stake in the firm.
This new funding will help the company in continuing its focus on producing best-in-class design and construction for its customers, along with the growth capital to keep advancing its business lines, which include:
- Plans for advancing Katerra’s businesses in Saudi Arabia and India, both of which are supported by established factory operations and positioned to help address important housing needs.
- The commercial release of the firm’s first building platform, a multifamily garden walk-up building and offering for cost and schedule prediction for developer customers.
- Supporting the growth of the US and Canada based mass timber market, using the firm’s world-class, cross-laminated timber manufacturing, design and installation capabilities.
- Growth of Katerra’s countrywide network of general contracts, renovations, and affiliated design partners, which will support the deployment of its building platforms along with traditional construction projects.
The company has been hit by Covid-19 pandemic related delays and cost overruns on some projects. It also had irregularities in its accounting practices. Despite these problems, Katerra is on track to make serious money in 2021, with revenue between US$ 1.5 billion and US$ 2 billion.
What Katerra has to say
Paal Kibsgaard, Katerra’s Chief Executive Officer said, “Since taking over as CEO in July 2020, my team and I have been hard at work reducing costs and refocusing on our core businesses. We believe that this strategic and operational realignment, supported by SoftBank, is in the best interest of all stakeholders and will provide Katerra with the financial flexibility and resources needed to invest in areas that have the most promising growth trajectory. We appreciate SoftBank’s continued support and confidence in the company and its prospects throughout this process.”
“As we move forward, we remain firmly committed to our vision of transforming construction. I would like to thank our shareholders, customers, partners and suppliers for their support, as well as our employees for their continued focus and commitment throughout an unprecedented year,” he also added.
About Katerra
Katerra is involved in advanced manufacturing facilities, design and construction services and has a growing product portfolio that involves whole-building platforms and sustainable mass timber. The company was founded in 2015 by Fritz H. Wolff, Jim Davidson and Michael Marks.
About SoftBank
SoftBank makes fixed-line, mobile telephony, internet, telecommunications, and digital television products. It has a subsidiary, SoftBank Vision Fund that specializes in growth capital and social impact investments. It was founded by Masayoshi Son in 2017.
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