Archinect - News

WeWork is cutting back as losses continue into Q3

2022-11-14T17:02:00-05:00

WeWork said Thursday that it was going to close roughly 40 “underperforming” locations in the United States and tempered its revenue forecast for the year, highlighting the challenges the co-working company still faces after its near collapse and subsequent bailout in 2019.

The company reported a pre-pandemic level matching 71% occupancy rate for Q3 but will fall short of previously projected revenue values for the year owing to “lower than expected” growth in the U.S., Canada, and Japan. Its own S9-designed Dock 72 corporate offices in Brooklyn were also reduced as a result of the financials. In an earnings call, CEO Sandeep Mathrani pointed to the “headwinds in the office sector” as a potential advantage as it looks to rebound and pay back debts to SoftBank and JPMorgan before 2025.

Ambitious construction startup, Katerra, finally folds after a challenging run

2021-06-02T14:12:00-04:00

An executive told employees on a video call that the firm didn’t have enough money to pay severance packages or unused paid time off, a person who attended the meeting said. The executive said the effects of Covid-19, as well as rising costs of labor and construction materials, contributed to its latest cash crunch.

Katerra, a closely watched startup founded 6 years ago, had a vision to reinvent the massive construction industry. After a few years of challenges and bailouts from investors, they've announced this week that they will shut down.

The CEO of SoftBank, Masayoshi Son, indicated that Katerra and WeWork were among the investment firm's biggest failures to date. Greensill, one of Katerra's lenders and another major investment of SoftBank's, also recently announced bankruptcy, making it even more difficult to save the company.

Katerra will be cutting thousands of jobs, possibly without severance or owed time-off pay, and is expected to abandon construction jobs previously contracted to Katerra.

To follow the rise and fall of Katerra, check out the related articles below...

Construction start-up Katerra receives major bailout from SoftBank

2021-01-05T20:50:00-05:00

Since our initial coverage of the Silicon Valley-based construction start-up, Katerra has experienced several ups and downs over the past few years. While the company has grown significantly since it was founded in 2015, financial issues continued to rise.

Katerra's CEO Pall Kibsgaard shared with the Wall Street Journal, "I think we underestimated the complexity of executing self-perform projects at a large scale, including manufacturing and material sourcing and managing our own labor."

In 2019 Katerra faced flopped overseas expansions as well as layoffs and cutbacks for the company. However, their relationship with Japanese investment firm SoftBank continues as the company invests $200 million to bail out the start-up as they enter 2021. SoftBank is one of the earliest and largest investors in troubled co-working company WeWork.

Katerra's goal to revolutionize the construction industry, specifically with mass timber and modular construction, continues to make headway. Kibsgaard...

Katerra stumbles as it expands overseas

2019-12-26T16:00:00-05:00

Katerra has failed to complete roughly a dozen projects and could only name one that was delivered on time. All the while, logistical and technology-based issues have chipped away at the company’s image as a revolutionary tech startup. Some clients have ended their relationship with the firm. Other clients, however, are tied to Katerra’s executives, and have drummed up business for the company—a similar arrangement used by WeWork executives, which became a concern for some investors

The Real Deal takes an investigative look at some of the recent business dealings and project announcements from Katerra. The vertically integrated construction and modular building components start-up is facing renewed media and financial scrutiny following the recently announced closure of its first fabrication plant in Phoenix, Arizona. Katerra recently opened a new 270,000-square-foot CLT factory in Spokane, Washington.

The company also recently expanded its project offerings in Saudi Arabia and India, the former of which is the biggest backer of Japanese technology start-up investor Softbank’s Vision Fund, a financial vehicle that backed WeWork, Compass, and Uber, three highly valued ventures that all stumbled in 2019.