By / Nate Berg, FastCompany
One of the biggest and best-funded companies in prefabrication and industrialized construction is going out of business.
Katerra, a Silicon Valley startup backed by billions of dollars in investment, will soon be closing. The Information reported earlier this week that Katerra notified employees that it plans to shut down.
Founded in 2015 with the goal of using mass manufacturing to streamline the messy process of constructing buildings, the company quickly gained attention from major investors and venture capital. In 2018, a venture capital fund operated by the conglomerate SoftBank invested $865 million, a stake that would eventually grow to more than $2.4 billion.
Katerra has factories in California, Washington, and India, and has completed dozens of projects, ranging from a Marriott Hotel in Texas to a 15-unit townhouse project in Arizona to a mixed-use 302-unit apartment building in Virginia. Katerra’s closure will result in the loss of thousands of jobs and the company’s withdrawal from dozens of construction projects in progress. It also raises questions about how it could have all gone so wrong.
Cofounded by Michael Marks, a one-time interim CEO of Tesla and former CEO of electronics manufacturer Flextronics, Katerra was a company built around the concept of vertical integration, using emerging technologies like robotics and automation to make the construction of buildings as optimized and as repeatable as manufacturing a widget. Katerra offered a “truly revolutionary integration of …