SoftBank-backed construction startup Katerra to open a California factory

Katerra , a self-described end-to-end provider of building services valued at over $3 billion, announced today that it’s opening a new advanced manufacturing factory in Tracy, California. Set to begin production in 2019, Katerra expects to employ 500 people at the factory.

Founded in 2015, Menlo Park-based Katerra most recently raised an $865 million new round of financing in January, led by SoftBank’s Vision Fund. Other investors include Foxconn and DFJ.

The company’s goal is to make the building construction process cheaper and more efficient by handling everything from the architectural design of the building to the construction of walls to the installation of appliances itself, cutting out the need for subcontractors. And in order to fulfill this vision, Katerra needs its own domestic factories. In addition to the soon-to-be opened Tracy factory, Katerra also has a factory in Phoenix, which employs 300 people. Katerra also announced in September that it is opening a a mass timber production facility in Spokane, Washington which will eventually employ 150 people.

The Tracy factory will produce a wide array of building components, including wall panels, floor systems, windows, cabinets, and finishes.

In a phone interview with VentureBeat, Katerra’s head of manufacturing Matt Ryan explained the company has determined that in order to keep logistics costs low, Katerra’s factories need to be within 500 miles of projects. So Katerra chose to locate the factory in Tracy, located just an hour drive from San Francisco in California’s Central Valley, in order to reach customers from Southern California up to Seattle. A Katerra spokesperson said that Katerra was also awarded a $10 million tax credit from the California Competes state program in order to build the Tracy factory.

“We had what we called semi-automation in the manufacturing of a lot of the key components [at the Phoenix factory] — as we transition to Tracy, we have worked diligently with suppliers around the world to provide a much higher degree of automation,” Ryan told VentureBeat. He explained that with the Phoenix factory, his team’s focus was to figure out how to optimize Katerra’s end-to-end production line — how to ensure that all of the building components hit the production line at the right time, and figuring out the right software to integrate. Now, he said many of those kinks have been smoothed out as the company prepares to break ground on the Tracy factory. When fully built out, Katerra claims that the factory will be able to produce the equivalent of 12,500 multifamily units annually.

Of the 500 roles Katerra plans to hire for, 440 will be in manufacturing roles — assemblers and production line leads — and 102 will be in operational support roles like general managers, HR, and IT. Ryan said that Katerra also hopes to open an R&D lab at the factory — luring nearby talent from Silicon Valley.

Within the next three years, Katerra hopes to open three more building components factories in the South and East Coast markets, as well as another mass timber production facility in the Southeast to serve its footprint of customers across the U.S. Right now, the majority of the company’s bookings are in the West Coast, South, and Northeast regions of the U.S., according to a Katerra spokesperson.

To date, Katerra has accumulated more than $1.3 billion in bookings for new construction projects, and employs about 2,000 people. The company has completed construction on two projects so far — a 386-unit apartment complex in Anaheim, California, and a 132-unit apartment complex in Spokane, Washington.