Real estate developers have unique insight into all the challenges of well, developing real estate.
Subscribe to the Crunchbase Daily
As such, it’s not entirely shocking when a real estate developer also becomes a tech company. Especially in the Bay Area, where housing costs and construction labor shortages are constraining supply. Case in point: Veev Group Inc. The San Mateo, California-based company has just closed a $97 million Series B round of funding that included $85 million in equity and $12 million in debt.
Zeev Ventures and Lennar Ventures (the arm of homebuilding giant Lennar Corp.) led the round, which also included participation from Eclipse Ventures, Green Spring Associates and Khosla Ventures. Western Technology Investment served as the debt provider.
Veev Group originated in 2008 as a traditional real estate developer and asset manager.
“In each project, we found new ways to improve the building process–always with the customer in mind,” said CEO and co-founder Amit Haller.
In 2017, Veev Group began to focus on prefabrication capabilities, and by 2018 it formally pivoted to what it describes as “a vertically integrated developer focused on building innovation.” (Note the company name changed in 2019 from Dragonfly Group to Veev.)
Over the years, Veev developed a proprietary panelized building system using materials such as steel frames, high-performance acrylic finishes and millwork, low-voltage lighting, and smart sensors. It uses a digital fabrication process, such as 3D design files fed to cold-formed steel and Computer Numerical Control machines, to design and produce new homes, specifically multifamily buildings and accessory dwelling units. Its current development pipeline totals more than 230 units (for lease and for sale) and 620,000 gross building square feet. The company is focused on building in the San Francisco Bay Area.
According to Haller, Veev recognized that the panelized system is more flexible in terms of design and site location than volumetric factory-built housing. Its lean manufacturing strategy (a 50,000-square-foot fabrication facility located in Union City) doesn’t require the capital investment that a large central factory does, thus providing more flexibility during economic cycles, Haller maintains.
“We are in the midst of a shift from traditional to digital design/fab/build and currently have a mix of projects given the development lifecycle,” he wrote via email.
Meeting a critical need
Veev declined to share financials. Haller did note that it currently has separate LLCs for development projects, from which Veev Group has equity stakes in and generates development fees. It also has a separate entity which generates fees from its panel fabrication and general contracting business, owns the intellectual property and equipment, manages supply chain and operations, and invests in research and development.
The company plans to use its new capital primarily to accelerate the development of its panelized building system, as well as to generally scale the business. Haller told Crunchbase News Veev has doubled its team over the last 12 months.
For Zeev Ventures Founding Partner Oren Zeev, the approach Veev is taking is critical for California and other high-cost markets.
Eric Feder, managing general partner of Lennar Ventures, said the housing sector is in “critical need of innovation across-the-board if we are to scale production.”
“Veev’s digital disruption of the design and fabrication process and acceleration of construction timelines will help us to meet market needs,” he said in a written statement.
We’ve written about other prefab builders, of course. The highest profile being Katerra, which has seen its share of bumps as of late despite raising $1.2 billion over time. Another is North Carolina-based Prescient, which offers both a software and hardware platform in the construction industry. Prescient specializes in building prefab apartments, student housing, senior housing and hotels. It’s raised over $100 million over its lifetime.
Interestingly, Haller also co-founded and is CEO of Reali, another real estate startup that raised $20 million in a Series B round led by Zeev Ventures in 2018.
Illustration: Dom Guzman