“Every day is a fire drill”: Construction startup Katerra struggles to stay on track as it scales up

“Every day is a fire drill”: Construction startup Katerra struggles to stay on track as it scales up


Company facing problems with delays and quality control

Construction startup Katerra — valued at $3 billion following an $865 million funding round in January including SoftBank — is struggling with delays and quality control as the company tries to scale up. Many in the real estate industry are paying close attention to the three-year-old company, which aims to cut costs by streamlining the construction supply chain.

But the company’s faced challenges such as scaling up automation at its flagship factory in Arizona, which had to be shut down soon after it opened because it lacked proper building permits, the Information reported.

And Katerra has struggled to find a way to install plumbing and electrical systems inside wall panels at the factory, leaving more work for crews to do on the construction site, according to the Information. One former Katerra manager said that, “Every day is a fire drill.”

The company’s also faced turnover in several key positions. Company co-founder and executive chairman Michael Marks, a onetime CEO of Tesla, said the turnover was “at our request as we sort out who the long-term players are.” He told the Information via email that the company has been making substantial progress.

“We’re doing great in all respects, growing revenue, increasing margins, breathtaking backlog, rapidly falling losses,” he wrote.

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