SoftBank-Backed Katerra to Shut Down
(Bloomberg) -- Construction startup Katerra Inc. is shutting down, according to a person familiar with the matter, a dramatic collapse for a company that raised about $2 billion from investors including SoftBank Group Corp.
Katerra, founded in 2015, had promised to shake up the construction industry with its efficient factories, prefab parts and modular construction units. The company has said it was working in countries including the U.S., India and Saudi Arabia. In February of last year, Katerra’s marketing materials touted 8,000 employees across the globe.
With major cash infusions from SoftBank and others, Katerra grew quickly, in part by acquiring smaller construction companies. But integrating those businesses proved difficult, and the company was forced to deal with construction delays and issues in trying to perfect its modules. The person who described Katerra’s closing asked not to be identified because the information is private.
In 2019, Katerra said it would cut 200 jobs, even after raising $865 million from investors the previous year. The company also shut down a factory in Phoenix, with the intention of focusing on a more highly automated facility in California.
SoftBank declined to comment on the company’s dismantling. Representatives for Katerra did not respond to requests for comment. Tech news site The Information earlier reported the news.
The demise of Katerra is a significant defeat for SoftBank, which had made a large bet on the startup’s transformative potential. In May, SoftBank founder Masayoshi Son called out Katerra specifically as an investment where it had made mistakes, along with WeWork and Greensill. WeWork saw its once-lofty valuation crater in 2019 as its attempt at an initial public offering fell apart. And supply-chain finance venture Greensill dramatically collapsed earlier this year. Son also said that SoftBank’s successes in startup investing outweighed its failures.
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