Israeli building tech unicorn hopes to work miracles

How would you like to be able to buy a new house designed according to your wishes, delivered in a quarter of the time it normally takes to build a new house, while leaving half the carbon footprint compared to other types of construction?

As Americans are cornered by a housing shortage, an Israeli-founded and run company in San Mateo, Calif., Veev, promises to do just that, reinventing prefab construction through new ways of assembling homes. faster, greener and more efficient than many other types of construction methods.

One of the few unicorns in the building technology industry, Veev started out in 2008 as a real estate asset manager. It pivoted around five years ago, dropping its initial name – Dragonfly Group – along the way. Today, she is in charge of building a number of high-end projects in northern California, and plans to embark on larger projects in the southern Golden State as well as in Texas. The company received a $400 million investment in March to expand operations in the United States and bolster its 100-person research and development team in Tel Aviv.

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While the materials used to build homes have changed over time, many other aspects of the building process have remained the same for hundreds of years. This highly fragmented process involves at least a dozen sub-contractors and around 200 laborers on a standard job site, each handling a different aspect of the house, from excavation to carpentry, through lighting and landscaping. Each trade has its own building materials and its own agenda. At best, everyone cares about delivering quality work for their part, but doesn’t consider the project as a whole.

The founders of Veev spent years researching market innovations and rethinking the process of building a home.

Prefab modular homes have been part of the American landscape for nearly a century and are spreading around the world. The prefab home market is expected to reach some $153.7 billion by 2026, with the highest demand recorded in the United States and China, followed by Japan, Canada and Germany. The North American market is growing at 2% per year and is currently estimated at $10 billion per year, with 934 companies working in this sector.

Israeli company Veev has developed a panel approach to produce fully clad walls, complete with mechanical, electrical and plumbing fixtures. (Credit: Veev)

But prefabricated houses are also stigmatized as being cheaply made, without charm and of a lower standard than traditionally built houses. Veev has overturned this preconceived idea: the company claims that by vertically integrating the home construction process and building a large proportion of them in factories, it can deliver a high-quality, cost-effective and sustainable home faster than the competition.

To do this, Veev pre-builds the walls of the houses in its factory, integrates the plumbing and wiring, and texturizes the wall finishes. The panels, which are easily customizable, are then transported to the construction site, where they fit together like Legos.

Veev creates its walls from steel and aluminum framing and high-performance cladding that is typically used to build hospital operating rooms.

The resulting panels are stronger than traditional walls, the company claims, and can be textured and printed in any finish, allowing them to replace granite, wood siding, terracotta or tile. of bathroom. They require no maintenance, are completely resistant to mold and odors, do not need to be painted; a soundproofing system is also integrated.

Veev says its method helps reduce construction costs, waste, and risk associated with projects that take a long time to complete (which also drives up costs). From architectural plans, the company builds a digital twin, modeling homes down to the square centimeter before a single piece of land is moved.

Site inspection is kept to a minimum, as building blocks are inspected and approved prior to assembly. Chief revenue officer and co-founder of Veev, Dafna Akiva, told the Times of Israel that these changes have allowed them to reduce their carbon footprint by 47% compared to traditional construction and to create homes that can be lived in more sustainably by using lower voltage circuits and smarter air conditioning.

Machinery at Veev’s prefab plant in California. (Credit: Courtesy)

Veev is hitting cruising speed just as the US is rocked by a housing shortage, with builders struggling to keep pace as they face a labor shortage work. The company’s projects, which must be near a wall manufacturing plant to be profitable, have all been based in the San Francisco Bay Area, one of the regions hardest hit by the shortage.

By building quickly, Veev and other prefabrication companies have positioned themselves as a potential solution to the crisis.

In 2020, Veev was awarded a contract to build 78 emergency housing units – each with a single bedroom and access to a common area – in San Jose, Calif., for the city’s homeless. Proponents of the project, including Governor Gavin Newsom, have touted the speed of the project and the low cost of housing: the city said each one cost it $85,000, compared to the $700,000 a normal home costs. apartment whose construction takes several years.

A house built with prefabricated materials produced by the Israeli construction technology company Veev. (Credit: Veev)

“San Jose is an example of how we can build housing in four months – where it used to take four years – for one-eighth the standard cost. This will become a national model for saving lives and rebuilding communities,” Mayor Sam Liccardo said in October 2020.

But in the rush to complete the homes and avoid cost overruns, Veev has been accused of cutting corners on safety, inspections and work practices. Among other things, the city says Veev still owes its workers hundreds of thousands of dollars in unpaid wages.

Most of Veev’s projects, however, are not public housing, but rather high-end homes that cost millions of dollars, and are built in partnership with private developers.

In mid-April, a seven-bathroom, five-bedroom, 500-square-foot Veev home in Palo Alto was put back on the market for $8.5 million (while it was was listed at $9.2 million for several months last year). In nearby San Carlos, a one-bedroom apartment in a building built by Veev is listed at over $1 million.

Workers assemble a wall made using Veev’s prefabrication process. (Credit: Courtesy)

In an interview with Ha’aretz At the end of 2020, the founders of Veev acknowledged that the costs of their construction approach were about 20% higher than those of luxury construction in Israel, while their retail price can be almost doubled.

Those prices are expected to drop as Veev embarks on larger projects involving thousands of units in lower-cost markets, including Southern California and Texas. To enter these markets, it will first be necessary to build a production plant nearby, which will increase efficiency and thus can reduce costs.

Dafna Akiva, CRO and co-founder of Veev. (Credit: Courtesy)

According to Veev co-founder Ami Avrahami, when asked about the company’s direction ahead of the latest funding round, the company has so far steered clear of commercial real estate and tower construction, believing that the greatest growth potential of the market for its ability to combine computerized production lines and customization lies in the residential space.

Nor does it plan to enter the Israeli market, where housing prices continue to climb and construction costs continue to rise.

Veev is far from the only company innovating in housing construction methods. The Californian company Factory_OS uses similar technologies, but with an emphasis on reducing costs. An Australian company allows buyers to design and order a prefabricated house online, which is then shipped to them. At least two American companies offer 3D printed houses. Others offer new technologies that transform other aspects of housing construction.

Not to mention, of course, there is the traditional house building industry.

According to Akiva, competition comes from both traditional builders and other innovators throughout the development and construction chain. “But we are the ones who cut back on the unpredictable and create homes that don’t age,” she said. “Veev has redesigned the way homes are built, and made them a better place for the people who will live there. »

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