Friday, January 10, 2020

Katerra Signs $650M Contract with Saudi Arabia to Build 8,000 Homes

The agreement follows turbulence in the construction startup’s U.S. business, including layoffs and executive departures
January 09, 2020 03:15 PM By David Jeans and Kathryn Brenzel

A SoftBank-backed construction startup that has faced questions about its ability to deliver projects in the U.S., just secured a contract to build thousands of homes in Saudi Arabia.

The company, Katerra, confirmed to The Real Deal that it has entered a $650 million contract with the Saudi Arabia government to build 8,000 homes in the country. Katerra declined to comment further.

The Silicon Valley-based firm, said to be valued north of $4 billion, has a sprawling portfolio of construction projects across the United States, Saudi Arabia and India. Fueled by venture-capital funding, Katerra has grown at breakneck speed since launching in 2015. The company offers a vertically integrated model for construction, by providing design, software, pre-construction and construction services.

The Saudi Arabia contract, signed in recent weeks, is part of a larger, $40 billion non-binding agreement Katerra signed with the government in October 2018 to deliver hundreds of thousands of housing units in the country. As part of that broader agreement, Katerra signed its first contract in May 2019 to build 4,101 units in five regions of Saudi Arabia.

But back in the U.S., Katerra is grappling with a patchy track record of executing projects and maintaining clients. The company faced a turbulent end to 2019 after cutting 200 staff, closing a factory and a co-founder leaving the board.

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