Katerra - a construction startup that had the financial backing of a number of top investors including SoftBank Group - is shutting down, reported Bloomberg citing sources. 

 

The company had a key presence in Saudi Arabia in addition to the US and India.

 

Katerra, founded in 2015, had promised to shake up the construction industry with its efficient factories, prefab parts and modular construction units. 

 

In February of last year, Katerra’s marketing materials touted 8,000 employees across the globe.

 

With major cash infusions from SoftBank and others, Katerra grew quickly, in part by acquiring smaller construction companies, said the source familiar with the matter. 

 

But integrating those businesses proved difficult, and the company was forced to deal with construction delays and issues in trying to perfect its modules, he noted. 

 

In 2019, Katerra said it would cut 200 jobs, even after raising $865 million from investors the previous year. The company also shut down a factory in Phoenix, with the intention of focusing on a more highly automated facility in California, said the source.

 

This is a dramatic collapse for a company that had raised about $2 billion from investors including SoftBank Group, he added.