Article

Real estate developer turned prefab home builder Veev closes on $400M in fresh funding

Tech Crunch

Mary Ann Azevedo

March 1, 2022

Veev, a real estate developer turned tech-enabled homebuilder, announced today that it has raised $400 million a Series D round that propels the company to “unicorn status.”

The financing brings the San Mateo, California-based company’s total raised since its 2008 inception to $600 million. Bond led the latest round, which also included participation from LenX (formerly Lennar Ventures), Zeev Ventures, Fifth Wall Climate Tech and JLL Spark Global Ventures. Veev last raised in March 2021 — a $100 million Series C. The company declined to reveal its exact post-money valuation.

Veev’s mission is straightforward: address the nation’s housing crisis “head-on.” In California alone, there is an estimated deficit of 3 million units. The company says that it has brought a system to market that is “4x faster than traditional means, at a lower cost and with a much lower carbon footprint.”

Interestingly, Veev Group started its life as a traditional real estate developer and asset manager. During its time developing properties, it found new ways to improve the building process, according to CEO and co-founder Amit Haller.

In 2017, Veev Group began to focus on prefabrication capabilities, and by 2018 it formally pivoted to what it described as “a vertically integrated developer focused on building innovation.” In 2019, the company name changed from Dragonfly Group to Veev.

Over the years, Veev developed a proprietary panelized building system using materials such as steel frames, “high-performance” acrylic finishes and millwork, low-voltage lighting and smart sensors. It uses a digital fabrication process, such as 3D design files fed to cold-formed steel and Computer Numerical Control machines, to design and produce new homes. At first, the company was focused on construction ADUs (accessory dwelling units), but now it is building multi-family homes and single-family homes at scale.

Veev’s panelized construction takes place in its 50,000-square-foot “Digital Fab” facility. Homes are manufactured there as a near-final product with all mechanical, electrical and plumbing (MEP) included, walls precision-cut, textured and fully cladded, Haller told TechCrunch. Those walls are then delivered directly to the construction site where they are prepped for installation.

“Panels are efficiently assembled on-site using our plug & play system,” he said. “Homes also come outfitted with Veev’s proprietary end-to-end operating system that serves as an interface between homeowners and their homes.”

The company believes that its panelized system is more flexible in terms of design and site location than “volumetric factory-built housing.” It also claims that a “lean manufacturing strategy” doesn’t require the capital outlay that a large central factory does.

Veev says that because it is able to build homes faster, its homes can be constructed (and sold) at a lower cost, according to Haller. He also claims that the company’s choice of material selection has resulted in 47% less CO2e than traditional construction materials, “meaning a Veev home’s carbon footprint is nearly half that of a traditionally constructed home,” he said. For example, Veev uses Light Gauge Steel (LGS) framing and High Performance Surface (HPS), which the company says “are lighter, stronger, and more sustainable than wood and drywall and with near zero waste.” The company’s 2022 goal is to further reduce a Veev home’s carbon footprint by an additional 25%.

While Haller declined to comment on revenue growth, he did say that he expected the company to achieve profitability “within two years” and that he expects production to be about 382% higher in 2022 than 2021.

“We’ve taken a ‘network’ approach to our expansion efforts — similar to what some major e-commerce companies have capitalized on with local distribution centers,” Haller said. “By replicating our Digital Fab facility near regions of demand, we’re able to build homes up to 4x faster than traditional means and avoid additional CO2e impact with unnecessary transportation.”

The company plans to use its new capital toward that scaling of its operations, expand construction and distribution to new markets and accelerate research and development initiatives.

Veev recently partnered with Lennar to construct a 102 attached-home community in Northern California, and current plans for expansion include, but are not limited to, Southern California and Texas.

Noah Knauf, general partner at Bond, said his firm believes Veev is “taking a revolutionary path to building homes.”

“Its software-defined, end-to-end manufacturing process provides an exceptional level of quality faster to customers, and will be pivotal in creating much-needed housing in the United States,” he said. “…We talk a lot about ‘disruption’ in technology, but what Veev is doing is truly groundbreaking.”

In recent years, a number of tech-enabled home builders have emerged to help address the nation’s housing shortage. Earlier this month, we reported on 3D-printing homebuilder ICON raising $185 million in a Series D led by Tiger Global Management. Also this month, we covered Homebound’s $75 million Series C and plans to serve as a “next gen” homebuilder to make it possible “for anyone, anywhere to build a home.” Notably, ICON too recently announced a partnership with Lennar, which is also one of its investors.

Veev appears undeterred by the demise of Katerra, a SoftBank-backed construction tech startup that essentially crashed and burned after raising over $2 billion in funding. Haller said that Katerra posed itself “as a full-stack supply chain company, adopting prefab construction tech to further its efforts.”

He added: “Veev’s taken a different approach, where the product – the home – came first. And the next stage for the company has been to scale by replicating the success of its Digital Fab near regional demand.”