softbank-backed construction giant katerra said to be shutting down after raising billions

Katerra to Cease Operations Following Financial Difficulties

Katerra, a construction technology startup supported by SoftBank, has announced it will be discontinuing its operations. This decision follows the depletion of over $2 billion in funding, as reported by The Information.

Company Overview and Recent Struggles

The company previously reported a global workforce exceeding 8,000 employees. Based in Menlo Park, Katerra aimed to revolutionize property construction by offering cost-effective building solutions for real estate developers.

Late last year, Katerra faced imminent bankruptcy. Rising expenses related to labor and building materials, exacerbated by the pandemic, were cited as primary contributing factors. A $200 million bailout from SoftBank provided a temporary reprieve, resulting in the investor acquiring a controlling interest after substantial prior investment.

SoftBank's Losses and Katerra's Position

Katerra’s collapse represents SoftBank’s most significant failure since the unsuccessful 2019 initial public offering of WeWork. While the Vision Fund portfolio generally experienced growth alongside the recent tech stock market surge, some of these gains have diminished in recent months.

Masayoshi Son, CEO of SoftBank, publicly identified Katerra, alongside the Greensill investment, as sources of regret during a recent interview with Barron’s.

Investor Base

Beyond SoftBank, Katerra secured funding from a diverse group of investors. These included Khosla Ventures, DFJ Growth, Greenoaks Capital, and Celesta Capital.

TechCrunch has contacted Katerra seeking official confirmation and further details.

The company's shutdown signifies a notable downturn in the construction tech sector.