KATERRA

Michael Marks had run Flextronics, one of the world's largest electronics manufacturers. Fritz Wolff ran a commercial real estate firm.

Together they asked a reasonable question: why is construction still done the medieval way — one brick at a time on site — when everything else is manufactured in factories? The answer, it turns out, is that construction is nothing like electronics manufacturing.

But in 2015, that answer hadn't revealed itself yet. They founded Katerra to vertically integrate the entire building process.

Katerra aimed to control every step of building construction: architecture, engineering, materials sourcing, factory manufacturing, and on-site assembly. They would design buildings using proprietary software, manufacture components (cross-laminated timber panels, bathroom pods, wall assemblies) in their own factories, and ship finished modules to construction sites.

The pitch was 20-40% cost reduction and dramatically faster build times. Revenue came from development contracts — they were both the builder and the technology provider.

Katerra's product was the building itself — or rather, the process of creating it. Their factories produced cross-laminated timber (CLT) panels, prefabricated wall assemblies, pre-plumbed bathroom pods, and kitchen modules.

Apollo was their proprietary software platform for building design and project management. They also offered architecture and engineering services through acquired firms.

The vision was a one-stop shop: you go to Katerra, they design your building, manufacture the parts, and assemble it on site.

SoftBank's money. Katerra raised $865 million in a Series D led by SoftBank Vision Fund in 2018, bringing total funding to about $1.3 billion at that point.

The plan was to use that capital to build factories, acquire architecture firms, buy a cross-laminated timber plant in Washington state, and scale operations globally. They opened facilities in the US, India, and Saudi Arabia.

They acquired multiple companies. They hired thousands.

The spending velocity was extraordinary — even by SoftBank portfolio standards.

Everything. Katerra tried to reinvent an entire industry simultaneously.

The factories had production problems. The software didn't integrate well with real-world construction workflows.

Projects ran over budget and behind schedule — the exact problems Katerra was supposed to solve. The company was burning through cash at a staggering rate while generating minimal revenue.

In 2020, CEO Michael Marks was replaced. By early 2021, Katerra had burned through nearly all of its $2 billion in funding with very little to show for it.

SoftBank Vision Fund was the dominant investor, putting in roughly $1.3 billion across multiple rounds. Other investors included Foxconn (the iPhone manufacturer), Greenoaks Capital, 8VC (Joe Lonsdale), and various sovereign wealth-connected entities.

The SoftBank money was transformative — it allowed Katerra to pursue a "blitzscaling" strategy in an industry that historically rewards patience and precision. That mismatch between strategy and industry was the fundamental problem.