SoftBank bails out Katerra with $200M cash injection

Deal makes Japanese firm majority stakeholder in construction startup

Once bitten, twice shy? Not so for Japanese investment firm SoftBank, which despite its ill-fated bet on WeWork has agreed to pump a pile of cash into another real estate tech startup.

SoftBank plans to invest another $200 million into struggling construction startup Katerra, a move that will effectively save it from bankruptcy, the Wall Street Journal reports.

Under the deal, Greensill Capital, a financial services company also backed by SoftBank, will get a 5 percent stake in Katerra in exchange for erasing about $435 million in debt, the Journal said. SoftBank will also become Katerra’s majority stakeholder.

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Katerra was founded in 2015 with a goal of transforming the $12 trillion global construction. But the company has had a patchy record, struggling with delays, cost overruns and mass layoffs.

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Katerra’s co-founder Michael Marks stepped down as CEO in May to work full-time for venture capital firm WRVI Capital.

“I greatly respect the backing that we got from SoftBank and wish them the absolute best and hope that I can be helpful,” he told the Journal in a statement Wednesday.

Paal Kibsgaard, formerly Katerra’s chief operating officer, stepped in as CEO with a directive to get the company’s finances in order.

SoftBank said in a statement Wednesday that Kibsgaard “addressed several operational inefficiencies and improved the financial trajectory of Katerra,” adding that the firm remained “committed to the company’s long-term vision and believes the current leadership team has the ability to make this vision a reality.”

[WSJ] — Sylvia Varnham O’Regan

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SoftBank bails out Katerra with $200M cash injection

Deal makes Japanese firm majority stakeholder in construction startup

Once bitten, twice shy? Not so for Japanese investment firm SoftBank, which despite its ill-fated bet on WeWork has agreed to pump a pile of cash into another real estate tech startup.

SoftBank plans to invest another $200 million into struggling construction startup Katerra, a move that will effectively save it from bankruptcy, the Wall Street Journal reports.

Under the deal, Greensill Capital, a financial services company also backed by SoftBank, will get a 5 percent stake in Katerra in exchange for erasing about $435 million in debt, the Journal said. SoftBank will also become Katerra’s majority stakeholder.

Read more

Katerra was founded in 2015 with a goal of transforming the $12 trillion global construction. But the company has had a patchy record, struggling with delays, cost overruns and mass layoffs.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

Katerra’s co-founder Michael Marks stepped down as CEO in May to work full-time for venture capital firm WRVI Capital.

“I greatly respect the backing that we got from SoftBank and wish them the absolute best and hope that I can be helpful,” he told the Journal in a statement Wednesday.

Paal Kibsgaard, formerly Katerra’s chief operating officer, stepped in as CEO with a directive to get the company’s finances in order.

SoftBank said in a statement Wednesday that Kibsgaard “addressed several operational inefficiencies and improved the financial trajectory of Katerra,” adding that the firm remained “committed to the company’s long-term vision and believes the current leadership team has the ability to make this vision a reality.”

[WSJ] — Sylvia Varnham O’Regan

COMPANIES AND PEOPLE

Tags