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 Katerraâ€™s majority stakeholder.
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.
Katerraâ€™s co-founder Michael Marks stepped down as CEO in May to work full-time for venture capital firm WRVI Capital.
â€śI greatly respect the backing that we got from SoftBank and wish them the absolute best and hope that I can be helpful,â€ť he told the Journal in a statement Wednesday.
Paal Kibsgaard, formerly Katerraâ€™s chief operating officer, stepped in as CEO with a directive to get the companyâ€™s finances in order.
SoftBank said in a statement Wednesday that Kibsgaard â€śaddressed several operational inefficiencies and improved the financial trajectory of Katerra,â€ť adding that the firm remained â€ścommitted to the companyâ€™s long-term vision and believes the current leadership team has the ability to make this vision a reality.â€ť