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Tech ‘Unicorn’ That Raised Millions for ‘Reinventing’ Walls Is Shutting Down

A home-building technology “unicorn” startup that had raised $600 million using claims that it was “reinventing the wall” is shutting down, the company told staff on Sunday.

One of many so-called proptech startups, Veev had developed what it described as a proprietary system for building its energy-efficient “prefab” smart homes. On its website, the company said it had “reinvented the wall” with something it called a Closed Wall System.

The Israeli business daily Calcalist reported over the weekend that the startup informed staff of the decision to close on Sunday, citing an inability to raise additional money. The company confirmed the news in a statement provided to the outlet.

“Veev was in the process of raising capital, which was canceled at the last minute. In light of the current market situation in Israel and globally, it was not possible to secure additional funding,” the company said in the statement provided to Calcalist. (A request for comment sent to Veev’s press email by Motherboard bounced back. Veev CEO Amit Haller did not respond to a message from Motherboard on LinkedIn.)

On its website, Veev says its headquarters is in Hayward, California, but its research and development center is in Tel Aviv, Israel. The company’s strong ties to Israel had previously helped it nab $100 million in investments from Israeli companies through the Tel Aviv Stock Exchange, according to Calcalist. The startup said in its statement that employees in Israel would be able to continue working until the company’s assets are sold off, though it was not immediately clear what would happen to employees in California.

Veev was founded in 2008 as Dragonfly Group and has focused on new construction of single-family homes and townhomes through prefabricated materials that are assembled before they arrive at construction sites, according to the company’s website.

At its peak, Veev boasted 400 employees, and the startup was able to secure $400 million in additional funding in February 2022 during its Series D round. The company self-reported the next month that it had been valued at over $1 billion, though it wouldn’t reveal the actual number.

But like many other Bay Area startups, the past few years have proven challenging for Veev. The company faced a particularly tough path after the Federal Reserve started to raise interest rates, making investors less willing to dole out hundreds of millions of dollars to startups and the price of home construction more expensive.

Supply chain issues only added to the problems, and Veev reportedly became unable to pay down interest on debt it took out to purchase California real estate. In November 2022, just 8 months after its $400 million funding round, the company laid off 30 percent of the staff, SFGate reported at the time.

Veev had claimed that its new way of building homes cut down related carbon emissions by 54 percent, and that its new “proprietary” “Closed Wall System” was the key. “We view the wall as the atomic building block of the home,” Veev stated on its site. Veev’s walls consisted of multiple panels including insulation and plumbing which snapped into place. The walls also had “smart home” touch panels to change heating and turn appliances off and on.

A flattering profile of the company that ran in Forbes last May said that the company’s homes could be built in just 30 days and that Veev’s “advancements [were] more representative of a technology company and not at all like housing companies that have been using the same processes for decades.”

The Forbes article also noted Veev was saving money by “minimizing labor” and not relying on “traditional trades.” The company had planned to build 500 homes per year with a staff of just a few hundred people.

Despite its recent struggles, the company appeared to continue scaling up its operations. A month ago, Chief Revenue Officer Dafna Ben Porat Akiva posted drone footage to LinkedIn of the company’s new factory in Union City, California. The footage showed a crane holding the United States and Israeli flags above a building. “So proud of Veev’s new home, coming up fast in Union City CA!,” Akiva wrote.

CEO and co-founder Amit Haller reposted the video and wrote, “Veev is building for humanity and a better world, while the USA & Israel fighting for humanity & and a better world.”

Heller and his co-founder, Avi Avrahami, previously founded an Israeli real estate listing site called Reali, which also folded in September.

In a release at the time, Heller attributed the closure in a press release to “challenging real estate and financial market conditions and unfavorable capital-raising environment.”

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