Katerra CEO and co-founder Michael Marks is stepping down from the Softbank-backed construction startup to work full-time as managing partner for one of its investors.
Marks, who founded the California-based company alongside longtime friend Fritz Wolff and Silver Lake’s James Davidson in 2015, will be replaced by Katerra’s chief operating officer Paal Kibsgaard, the company announced Tuesday.
Marks indicated that he will move full-time to his existing role as managing partner of venture capital firm WRVI Capital, which invested in Katerra in 2017 through its WRV II fund, according to the company’s website.
Marks is tied to at least two entities that have either invested in Katerra or its projects directly. He and the other co-founders launched Paxion, which has invested in Katerra as well as some of Katerra’s clients. They also formed an investment fund called Kandle, which has, in part, allowed them to take an equity position in some of Katerra’s projects.
Representatives for Katerra didn’t respond to requests seeking additional information.
Kibsgaard is the company’s fourth CEO since it was founded in 2015.
In the company’s press release, Marks said Katerra always planned to eventually appoint Kibsgaard as CEO — though Marks became CEO in 2017, a year after Kibsgaard joined the firm’s board. Last year, Kibsgaard was tapped COO.
The company also announced $200 million in new financing from SoftBank’s Vision Fund. SoftBank reportedly already poured north of $1 billion into the company. The Wall Street Journal first reported the news of Marks’ departure and the funding round.
During Marks’ tenure as CEO, Katerra’s workforce swelled to more than 8,000, according to the company. But the firm announced in April that it laid off 3 percent of its workforce, which would amount to 240 people based on Katerra’s figures. Company representatives wouldn’t provide further details on the layoffs.
The news came after Katerra closed one of its factories in Phoenix and reportedly laid off 200 employees. Over the last few years, the company has grappled with cost overruns, client conflicts and executive turnover. Last year Wolff, whose development company had supplied Katerra with its initial pipeline of work, stepped down from the board. It’s not clear whether Marks will remain on Katerra’s board or follow Wolff in retaining an advisory role.
As with other SoftBank-backed firms, Katerra has faced scrutiny over whether its rapid growth strategy will ultimately pay off. Last November, Marks told The Real Deal that he expected the company to become profitable sometime in 2020 and that it could go public sometime after 2021.
Write to Kathryn Brenzel at [email protected]