By: Michael Marks – CEO
As we near the end of 2019, today I want to reflect on this year and the road ahead.
Katerra is remaking a very large industry. This year we have generated approximately $1.7 billion in revenue, more than double last year, and we are on a path to operating profitably in 2020. In four short years, we have grown to 8,000 global employees with a project backlog of $4 Billion, and a pipeline of over $15 Billion. We have 4 factories in 3 countries, and we are expanding manufacturing in these locations to meet growing customer demand. While the Wolff Company was our first and most prominent customer, they now represent just 15% of our customer base, which has grown to include some of the leading developers in the US.
Such progress would not be possible without the $2B + we have raised from our investors, which are some of the most respected investors in the world. They include not only SoftBank and Foxconn, but also some of the most highly respected country investment funds.
When we launched this company, we were initially a materials-only business. But we quickly expanded to design, manufacturing, and construction when we realized that to truly gain efficiencies, we needed to be vertically integrated. Today, we are a highly diversified business. We partner with our developer customers to provide end-to-end services and deliver our fully manufactured building platform products. This is what we have marketed most aggressively and where we see the biggest opportunity to remake the industry. We also have an incredibly strong general contracting business, an equally strong renovations business, and a rapidly growing building materials business.
This diversity is very much on purpose. Customers in the building industry have a lot of needs and we want to help with all of them. The fact that we build buildings that are designed by others and not manufactured does not compromise our vision – it provides an important service. We will build our own designed buildings, we’ll build what our customers bring to us, we’ll supply just materials. All of these services make us stronger and more competitive.
Our achievements in 2019 speak further to our tremendous progress and potential:
- We soon will launch building platforms that are the lowest cost, best building products that have ever been created. This includes several multifamily and commercial office products that we intend to debut in the US in 2020. In India, we are completing the first of a line of affordable urban high rise residences. In the US, the first product is low rise residential, and it has been released quietly. We are fortunate to have booked this product with five major developers who will be announced during the first quarter of 2020.
- We are launching as a separate company our software, called Apollo, and we can’t keep up with the interest level from potential customers. No other software provider has a complete end-to-end solution.
- Our Mass Timber initiative is quickly emerging as world-class. That includes a $130 million factory in Spokane, one of the best in the world. It also includes Michael Green Architecture, among the best CLT architecture firms in the world, and Equilibrium, among the best CLT engineering firms in the world. We only do plant tours on Thursdays, and those tours are booked out through February.
- We are launching a line of products for the office space world, including portable conference rooms, telephone pods, and desks. In the US, we are launching high quality windows at a great price, made at our Tracy factory. And in February we’ll introduce an intelligent HVAC unit, which will provide unprecedented comfort features at a great price.
- In India, our business model mirrors exactly what we’re doing in the US. We have booked projects from the largest companies in the world, including Microsoft, Infosys, Lulu Malls, and many others. In Saudi, we have signed an MOU for $40 billion to build affordable housing. We have already delivered the first units, and by Q2, 2020 we expect to be delivering 10-15 homes a day, which has never been accomplished. We are capacity constrained in both locations.
- We have a Board of Directors including some of the most experienced executives in the world, including Lisa Picard, who runs EQ Office for Blackstone, Neil Mehta who runs Greenoaks Capital, Jim Davidson, founder of Silver Lake, Paal Kibsgaard, former CEO of Schlumberger, as well as directors from SoftBank and Foxconn, themselves representatives of some of the most successful companies in the world.
Yes, we have had many learnings along the way. We can say with pride, though, that once we begin a project, we never walk away from that job. And our customers understand that and award us new projects. Like any healthy company, we will continuously improve our processes, talent, and technology. Katerra is a great company driven by varied and wonderful employees, customers, investors and suppliers.
We should all be proud of the huge amount of work we’ve accomplished this year. Thanks to your contributions, we’re well positioned for further growth and to deliver even more optimized buildings and projects to our customers in 2020. I’m excited for what’s to come and glad we’re on this adventure together.
Thank you for all you do.
Photo captured by Dan Silvertree in Hillsboro, ORBack