SoftBank’s $200M Bailout Saves Katerra from Bankruptcy
The Latest Chapter in Katerra’s Turbulent Journey
SoftBank Group has stepped in once again to rescue construction tech startup Katerra, injecting a critical \(200 million investment to prevent bankruptcy. This lifeline comes after the company reportedly burned through approximately \)2 billion in previous funding from the Japanese conglomerate.
Key Details of the Bailout Deal:
- Funding Source: The capital comes from SoftBank’s Vision Fund 1
- Debt Restructuring: Greensill Capital cancels $435M debt for 5% equity stake
- Shareholder Approval: Deal was approved by Katerra’s shareholders on December 30, 2020
A History of SoftBank’s Support for Katerra
This marks the second $200 million injection from SoftBank in 2020 alone. The previous bailout occurred in May when former Schlumberger executive Paal Kibsgaard took over as CEO to restructure the company’s finances.
Katerra’s Funding Timeline:
- 2015: Company founded with ambitious plans to disrupt construction
- 2018: Raised $865M in SoftBank’s mega-round
- 2020 (May): First $200M bailout under new leadership
- 2020 (December): Second $200M bailout to avoid bankruptcy
Challenges Facing the Construction Disruptor
Despite its innovative vertically integrated approach, Katerra has faced significant hurdles:
- Project delays and cost overruns
- COVID-19 pandemic impacts
- Accounting irregularities discovered in 2020
Financial Performance Outlook:
While struggling operationally, Katerra projects substantial revenue:
- 2020 Revenue Estimate: \(1.5B to \)2B
- 2018 Bookings: $1.3B across commercial/residential projects
The Bigger Picture in Construction Tech
Katerra’s ambitious vision aimed to transform the $1 trillion+ construction industry (November 2018 U.S. spending alone). However, its journey highlights the challenges of scaling innovation in this traditionally slow-moving sector.
Sources: The Wall Street Journal, TechCrunch Archives, U.S. Census Bureau
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