SoftBank Group is reportedly investing $200 million to bail out Katerra, a startup that had hoped to remake the construction industry with a vertically integrated approach, according to a report in The Wall Street Journal.
Katerra’s shareholders reportedly approved the new investment on Wednesday, with the new lifeline from SoftBank coming on top of roughly $2 billion that the Japanese technology conglomerate had already committed to the venture.
Funds for the bailout, which will save Katerra from bankruptcy, will be coming from SoftBank’s Vision Fund 1, the Journal quoted Katerra chief executive Paal Kibsgaard as telling company shareholders in a message.
As part of the funding, the SoftBank-financed financial services firm, Greensill Capital, is cancelling around $435 million in debt in exchange for a 5% stake in the company, according to the Journal’s reporting.
This new bailout actually marks the second time that SoftBank has stepped in to dole out $200 million to Katerra this year alone.
In May, when Kibsgaard, the former head of oil services developer Schlumberger, was brought in to fix the company’s finances, SoftBank poured $200 million into the company so Kibsgaard could right the ship there, according to the Journal’s reporting.
Katerra has raised multiple hundreds of million dollar rounds from the Japanese technology conglomerate since its launch in 2015. Back in 2018, when the company closed on $865 million in financing, Katerra was claiming bookings for $1.3 billion worth of commercial and residential projects ranging from hospitality to student housing. That’s a large number, but a fraction of the $1 trillion spent on construction in the month of November 2018 alone, according to data from the U.S. Census Bureau.
Katerra has been hit by delays and cost overruns on some projects, while the COVID-19 pandemic delayed others. And irregularities that the company discovered in accounting practices also added to headaches, according to the Journal.
Despite its missteps, Katerra is on track to make serious cash this year, with revenue between $1.5 billion and $2 billion, according to details Kibsgaard gave to the Journal.
from TechCrunch https://ift.tt/2JxCDyA
via IFTTT
No comments:
Post a Comment