We recently co-led a $52M BB round in Mighty Buildings, the leader in 3D printing construction technology known for its prefabricated and climate-resilient homes, alongside Bold Capital and Khosla Ventures. The California-based startup was established in 2017 with a mission to produce near-zero waste residential homes using polymer composites, 3D printing and robotic automation.
Experiencing firsthand how the pandemic increased the severity of the housing crisis and labor shortage in the U.S., Mighty Buildings, led by Scott Gebicke, aimed to accelerate their commitment towards providing sustainable housing by utilizing the new fundraise to expand to North America and the Middle East.
MarketModular construction - which refers to the process of building units off-site and under controlled plant conditions - has an expected market size of $138.9 billion by 2028. Every year, on average 13% of US single family homes are prefabricated. Sweden, on the other hand, has taken it to the next level with a modular housing market share of 85-90% of new homes in 2020. Countries like Australia aspire to increase the share of modular housing by 3-fold from current 5% to 15% by 2025.
Cost AdvantageMighty Buildings' technologies, superseding other Modular construction technologies, is able to put together an entire home in as less as 2 months, bringing the total construction cost down by 35%. Considering traditional construction methods take up to 7-9 months to build an identical housing unit, it is clear how modular construction can offer solutions to both environmental and housing crises by cutting costs, waste, and operational hours.
Emission ReductionMighty Buildings uses patented polymer-based composite materials to replace concrete, which is considered the main driver for carbon emissions in the construction industry. These composite materials are 75% lighter yet 3-4x stronger than concrete, which helps in creating highly durable home skeletons that can withstand harsh climates and extreme weather conditions, including hurricanes and earthquakes. Today, Mighty Buildings has delivered over 50 homes across United States and has a solid hundreds of millions of dollars' worth sales pipeline across US, Caribbean and the Middle East.
Investment ThesisIn addition to the patented technology and the impressive traction among global investors backing the company (including Khosla Ventures, Bold Capital, Y Combinator, Polyvalent Capital, amongst others), what firmed up our investment thesis was the world-class team of entrepreneurs from hardware production, material sciences, sustainability, construction, and real estate.
LocalizationBased on the local market assessment, we realized that KSA and GCC modular construction markets are worth $2B and $10B, respectively. Despite projections reaching up to $15B for the regional market alone, not many modular construction startups exist in the region today due to the technology itself being relatively nascent worldwide.
With this billion-dollar market gap, and our expanded investment approach of localizing global frontier technologies, we're thrilled to partner with Mighty Buildings as they drive the move towards sustainable, cost-effective, homebuilding. The company is already working on setting up a legal entity in Saudi Arabia to facilitate the launch of its next-gen modular homebuilding kit, the localization of high-quality tech jobs, and the start of a regional movement towards sustainable, smart, and climate-resilient homes.