Billion Dollar Unicorns: Katerra Tackles The Construction Industry With Technology

The construction sector is one of the largest in the world economy, with about $10 trillion spent on construction-related goods and services every year. However, according to a recent report from McKinsey Global Institute, the industry’s productivity has trailed that of other sectors for decades, and there is a $1.6 trillion opportunity to close the gap. Katerra is a recent entrant to the Billion Dollar Unicorn club that is attempting to bridge this gap with its technology.

Katerra’s Offerings

Scottsdale, Arizona-based Katerra was founded in 2015 by Michael Marks, ex-CEO of technological manufacturer Flextronics, now known as Flex. Marks left Flex in 2006 and went on to become an investor and join the boards of few other companies like Zappos and GoPro. During this time, he met with a real estate investor friend who apprised him of the issues affecting big real estate developers in tracking project costs. Due to the wide network of general contractors and their sub-contractors involved in the development of a big project, builders are unable to see how much the components of the building cost. They thus find it difficult to keep track of the project costs.

Marks realized that there was a need to build a solution that could solve this issue for the builders. He set up Katerra as a technology-driven company to assist these builders. Katerra offers a fully integrated service model so that the builders don’t need to depend on multiple partners and vendors. Its solution helps remove unnecessary time and costs from building development, design, and construction while ensuring quality and sustainability of the project. By controlling the entire process, it hopes to remove the middlemen in the project and help manage costs.

Based on the nature of the building that the builders want to build, Katerra uses its software solutions to prepare suggested layouts and associated costs. The builders approve the design they like and Katerra assembles the housing components in its Phoenix factory and ships the prefabricated components to the building site.