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Prefab homebuilder Veev to shutter after funders abandon former 'unicorn'

Kate Talerico, The Mercury News on

Published in Business News

Bay Area prefabricated construction startup Veev, which promised to slash the time and costs required to build new homes, has announced to its employees that it plans to shutter operations after acquiring unicorn status just last year.

The company, with offices in Hayward and Israel, said in a statement that the closure comes because the startup, which launched in 2008 and was once valued at more than a billion dollars, failed to close a recent financing round. This week, the company laid off most of its 250 employees, according to LinkedIn posts from employees. Veev had only recently finished construction on its first single-family home, which the company intended to bring to market in 2024.

With Bay Area land and construction costs soaring, the company promised a way to build infill housing faster and cheaper. Rather than building a home entirely on-site, Veev built panels, which included electrical wiring, plumbing and other components, in their Hayward factory. The panels could then be transported to a home site and assembled in about a month, rather than the seven months it typically takes for traditional homebuilders.

The company, founded by Israeli immigrant Amit Haller, began as a traditional development company, building luxury properties around the Bay Area. Veev pivoted to prefab construction in 2018, focusing mostly on attached homes and accessory dwelling units, commonly known as mother-in-law units or granny flats. In recent years, Veev had raised $600 million from investors like homebuilding giant Lennar and San Francisco-based venture capital firm Bond.

They benefited from a new state law passed in 2021, SB 9, which allowed owners of single-family homes to subdivide their lots or build two units where once only one was allowed. Modular construction was seen as a way to remove the headache for homeowners who wanted to take advantage of the new law.

But warning signs that the company was in distress began to appear in the last few years.

 

In March 2022, the company reported a $400 million funding round. The first $200 million was meant to go toward a new factory where Veev would assemble panels for multifamily buildings. But as high interest rates pushed up costs and consumers demanded lower-density housing following the coronavirus pandemic, Veev decided to turn its focus away from multifamily to single-family construction.

In November 2022, Veev pulled out of an agreement with homebuilding giant Lennar (one of the company’s main investors) to build a 102-unit attached home development in Northern California. Around that time, Veev also laid off around 100 employees, a third of its workforce.

The second half of the $400 million round never materialized. Following the company’s pivot, major investors like Lennar backed out, Business Insider reported. The company tried to raise additional funding and when that was unsuccessful, tried to get investors to fund them with a bridge loan — but they could not manage to scrape together additional funds. As of November, the company had stopped paying interest on some of the loans it had taken out to finance property purchases.

Investors Lennar and Bond did not respond to a request for comment.

Veev is not the first modular homebuilder to struggle. In 2021, Menlo Park-based Katerra, which was backed with more than $2.4 billion from Softbank Group’s Vision Fund, filed for bankruptcy.


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