Three global venture capital firms have invested £5 million into Modulous, a British company developing digital solutions to modernise the design and construction of affordable and sustainable housing.
Unlike other companies seeking to exploit modern methods of construction (MMC), Modulous is an asset-light business with no factories. Instead, the company's global supply chain and its investment in logistics will enable it to become more scalable and more responsive to the cyclical nature of housebuilding.
Blackhorn Ventures, CEMEX Ventures and GroundBreak Ventures have backed London-based Modulous which has created a software platform to streamline design and overhaul the inefficient logistics that weigh down the sector. Alongside its software platform, Modulous has developed a precision-engineered apartment product that enables high-quality, affordable, sustainable homes to be computer designed and delivered to a specific cost.
The new funding will expand the company's building design team and grow its technology group in order to speed up the evolution of its software platform being developed to exploit digital technology in a bid to make delivering homes better in every way.
The game-changer is that the Modulous design software platform combines with its own modular building system – its kit of parts. This enables developers and housing associations to specify the sort of building they want, harvest local planning regulations to determine what is permitted and then quickly generate designs that accurately detail the precise cost. Because every building component is mapped within the system - like a wardrobe from IKEA - it is possible to monitor and measure the carbon footprint of every single building on a mass scale.
Sections of the building are supplied by a selection of high-quality supply chain partners, including Knauf, CEMEX, Ideal Standard and Ibstock. The software platform orchestrates the logistics to ensure that components arrive just in time and sequence - which can play a critical role in helping inflate construction companies' margins.
The investment round was led by Blackhorn Ventures, a cutting-edge US fund with around $200m under management in early-stage construction, transport and energy firms. It brings
together the venture arm of the multi-billion dollar materials titan CEMEX and Toronto-based proptech investor GroundBreak.
The deal represents the second rounds of investment from Blackhorn Ventures and CEMEX Ventures.
Chris Bone, chief executive (CEO) of Modulous, says:
"Our digitally-led approach to project management and innovative 'kit of parts' platform delivers sustainable, high quality housing at a fraction of the time of traditional construction.
"As the costs of materials rise and profit margins are continually squeezed, Modulous provides partners with the end-to-end tools necessary to accurately estimate project costs, compress programme timescales and mitigate against the risks inherent in planning, design and implementation.
"It's a system that solves multiple problems plaguing the industry for decades, while engaging flexible, net zero-ready technologies that allow our partners to realise high-speed assembly and installation."
Phillip O'Connor, managing partner and co-founder at Blackhorn Ventures, said:
"This is about far more than modular housing. The opportunity here with the suite of products Modulous is developing is to create a standard akin to Pro Tools which can orchestrate and produce all elements of the housing process. Technology will not replace the many talented architects, engineers and construction workers - but simply enable them to focus on what they do best, making their jobs more profitable and enjoyable. And their capital-efficient, outsourced manufacturing business model allows Modulous to weather fluctuations in demand that characterize construction in contrast to capital-heavy, vertically integrated modular housing developers."
Mateo Zimmerman, investment manager at CEMEX Ventures, said:
"We have to put Industrialized Construction and MMC at the heart of design, manufacturing, logistics and assembly. The change to a "product mindset" (instead of project mindset) will open up many opportunities and benefits for our industry, such as efficiency, climate action and sustainable profitability. Modulous is offering an unrivalled value proposition based on technology, flexibility and scalability.``
Scott Kaplanis, partner at GroundBreak Ventures, said:
"The scalability of the Modulous suite of products is vast and its ability to work with governments around the world to help solve global challenges of creating and delivering sustainable and affordable housing means we see a huge opportunity to grow the firm and support local construction firms and supply chains."