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Shortages of Construction Materials Fuel Growth In Modular Homebuilding

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Modular and prefabricated construction has gained popularity in recent years and construction materials shortages are further poised to elevate the sector, according to executives in the space. 

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Startups in the construction space have raised nearly $1.5 billion so far this year, more than the nearly $1.2 billion the sector raised in all of 2020, per Crunchbase data. Companies focused on building materials specifically have raised more than $430 million this year, per Crunchbase data, with Prescient’s $190 million funding round leading the pack in May, followed by Veev’s $100 million round in March. 

The main reason for these new ways of building is clear: There’s a very real housing shortage in the United States, and it’s only gotten worse since the COVID-19 pandemic hit, disrupting supply chains and impacting the construction industry as some projects were paused. 

According to mortgage loan company Freddie Mac, the shortage of U.S. homes to meet demand has grown by 52 percent from 2.5 million homes in 2018 to 3.8 million in 2020, with that figure expected to rise. Demand is going up, especially with low interest rates that encourage homebuying, per Freddie Mac.

To add to the problem, many homes in the U.S. were built 70-some years ago, and are due to be rebuilt for one reason or another, according to Amit Haller, CEO of Veev, which builds prefabricated multifamily homes and accessory dwelling units using primarily steel and other alternative materials. 

Additionally, there’s a shortage of skilled labor, with only so many people who are able to build homes the way they’ve traditionally been built, he said.

“Not only do we have so much to catch up, we have so much to rebuild,” Haller said. “That means one thing: it’s a nonlinear problem. This problem requires a lot of disruption in construction.”

That’s prompted a lot of new startups in the homebuilding space to spring up, including some that use alternative materials to build homes and others that use tech to streamline the building process. While they’ve been more in the spotlight recently as the construction industry has faced a materials shortage and the lumber shortage has received the most attention, there’s also been shortages in other areas such as copper and windows.

Some of the recently funded companies in the construction tech space include Veev, which raised $100 million in March, and Mighty Buildings, which uses 3D printing to build prefab homes using materials including synthetic stone and raised $40 million in February.

The continued venture investment in the space came even as the most highly funded construction technology startup in the world, Katerra, was headed for implosion. The startup had raised at least $1.6 billion in known venture funding, mostly from SoftBank, but filed for Chapter 11 bankruptcy protection on Sunday.

The price of construction commodities including lumber and gypsum are the latest pressure point on the industry, which has been trying to find new ways to increase productivity, decrease cost and increase sustainability, according to Kathleen Egan, CEO of construction tech company Ecomedes.

Lumber prices spiked at the beginning of the pandemic, according to Salman Ahmad, CEO of construction tech company Mosaic Building. Although those prices finally dipped somewhat last week, they’re still up 300 percent year over year, according to the National Association of Home Builders. And a record number of builders reported material shortages last month, according to the association.

Companies such as Veev that use alternative materials have been less affected. Veev, for example, uses mostly steel instead of lumber, and uses high-performance surfaces rather than drywall. The company hasn’t been impacted significantly by the materials shortages, Haller said.

Modular home builders in the public markets are also on a tear. The stock price of Skyline Champion, for example, has increased by 102 percent over the past year. 

Prefabricated home building involves manufacturing the parts of the structure offsite, while modular construction is a form of prefab construction involving the assembly of whole sections offsite and assembling them onsite.

A person’s home is the largest, most expensive and most-used consumer product, Haller said. Homes aren’t often seen as a consumer product, according to Haller, but they are one in a way. And just like a consumer would want to buy a new phone with the latest camera, the same goes for home technology, he said.

“Once you start to think about the home as a product, you have to ask yourself questions about usability and sustainability. Is it the latest and greatest technology?” Haller said.

There’s always been a bit of curiosity in alternative materials in the construction industry, but there’s been a renewed interest as people look at how technology can make the construction industry more efficient, according to Ahmad.

“I think there’s some acceleration of that than what you’ve seen historically, and I think there’s a renewed interest in that candidly with where lumber pricing is today.”

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

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Source: https://news.crunchbase.com/news/shortages-of-construction-material-and-skilled-labor-fueling-growth-in-modular-homebuilding/

Fintech

Business accounts for founders? ‘Reimagine’ a better future (Sponsored)

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As EU-Startups is a small company, we understand the frustrations faced by founders and their teams. It’s not uncommon for founders to contact us with their common pain points asking for advice, and we often hear about shared challenges of European founders through our news and interview articles.

Remagine, the financial launchpad for startups, has conducted proprietary research on this topic, and revealed several pain points commonly felt by early-stage startups, which are not, it seems, currently addressed by products on today’s market. Of these, they have identified a few:

  1. The time wasted managing expenses
  2. The difficulty with delegating financial responsibilities when compared to scaling business
  3. That most founders and their communities care about being purpose-driven and impactful, but are uncertain how to incorporate this into their business

Remagine’s mission is to help founders reach their goals, and startups develop on their own terms. From incorporation to scaling and beyond, they help startups grow in a way that’s great for people, planet and profits.

As experienced entrepreneurs themselves, Basti and Julia’s goal when they co-founded Remagine was to create a more holistic approach to financial services. Beyond just offering a financial product, Remagine acts as a partner to founders, supporting them through important milestones.

This intimate collaboration with startups has seen great success so far. One of their first lending customers grew sales by 45% thanks to their funding solution. What makes this even more impressive is that they achieved this without giving up any control over their business.

Remagine’s founder-friendly and tech-driven solutions are designed to help founders scale their business while keeping their hands on the steering wheel. A core part of their offering is inspiring startups to be more sustainable and impactful as they grow. They achieve this in three important ways:

  1. Revenue Based Finance: Their financing solution gives startups cash injections for a clearly defined purpose, like marketing or advertising. Founders can fund growth without diluting equity or giving up a board seat. Startups can receive up to €1 million in funding quickly and the loan repayment is flexible, via a fixed percentage of company revenue.
  2. Building a growth roadmap: Remagine works hand-in-hand with startups to help them reach and surpass their goals while also having a positive impact on the planet. They understand how tricky the early stages of launching a company can be, and are there to support founders.
  3. Business accounts (coming soon): Their products are tailored specifically to founders and startups.

Curious to learn more? If you’re interested, you can join the waitlist to be among the first to get access and become part of a movement that is using business for good.

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Source: https://www.eu-startups.com/2021/06/business-accounts-for-founders-reimagine-a-better-future-sponsored/

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Start Ups

Oslo-based Memory raises €11.6 million to scale its time-tracking tool & launch ‘deep work’ tool

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Norwegian AI startup Memory, which builds software to help businesses make dramatically better use of their time, today announced an investment of around €11.6 million led by Melesio and Sanden, with participation from existing investors Investinor, Concentric and SNÖ Ventures.

Founded by Norwegian entrepreneur Mathias Mikkelsen, Memory pursues an ambitious vision of an AI-enabled future, seeking to create tools which solve the abuses of time in the modern workplace. 

The investment is a direct response to the continued success of Memory’s much-loved first product, Timely, which has been used by over 500,000 people since first launching in 2014. The automatic time tracking tool has quickly become a service-industry staple and is currently used by more than 5,000 paying businesses across 160 countries. It enables businesses to salvage the time and money lost every day to inaccurate manual time tracking, by automatically capturing time spent on all work activities and streamlining invoicing, project management, resource allocation and reporting.

The tremendous shift towards remote and hybrid work models presents a huge opportunity for Memory, which will use the funding to accelerate Timely’s growth internationally within the time tracking and virtual work management market. Funding will also support the development and launch of Memory’s highly anticipated “deep work” tool, Dewo, which leverages AI to help teams create more time for focused, distraction-free work.

In what proved to be a fast-moving and high-demand investment round, Mikkelsen had the fortunate opportunity of picking between a slew of investors for the round.

Mathias Mikkelsen, Founder and CEO of Memory, commented: “We’ve been extremely careful with the investors we’ve brought into the fold and I think that shows by the continued support we’ve received from our existing partners each step of the way. Melesio and Sanden will fit perfectly into that mix; the speed and execution with which the team moves makes them a match made in heaven. They have made a big impact in the Norwegian startup scene, with excellent journeys in both Kahoot and Boost.ai, and we look forward to building something massive together.”

Arild Engh, Partner at Melesio, commented: “Memory’s proven software is already acrredefining how businesses around the world track, plan and manage their time. We look forward to working with the team to help new markets profit from the efficiencies, insights and transparency of a Memory-enabled workforce.”

Kjartan Rist, Partner at Concentric, commented: “We continue to be impressed with Memory’s vision to build and launch best-in-class products for the global marketplace. The company is well on its way to becoming a world leader in workplace productivity and collaboration, particularly in light of the remote and hybrid working revolution of the last 12 months. We look forward to supporting Mathias and the team in this exciting new chapter.”

Ronny Vikdal, Investment Director at Investinor, commented: “It has been a pleasure to be a part of the company’s development over the last few years. We are very impressed by Memory’s team and the results they have created so far. With $14 in place and with new strong investors onboard, Memory is well positioned for continued fast growth.”

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Source: https://www.eu-startups.com/2021/06/oslo-based-memory-raises-e11-6-million-to-scale-its-time-tracking-tool-launch-deep-work-tool/

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Why NBA superstar Steph Curry just invested in Seattle pay equity startup Syndio

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NBA star Stephen Curry. (Aubrie Pick Photo)

Seattle pay equity startup Syndio has scored more than $30 million in funding in its four years, but a new $1 million assist from early-stage investors Penny Jar Capital, announced Monday, is especially noteworthy because the firm is anchored by NBA star Stephen Curry.

A two-time league MVP with the Golden State Warriors, some have called Curry the greatest shooter in NBA history. Off the court, the shots he’s taking on companies such as Syndio are also gaining attention.

“This was really important to me because he’s not part of this hype cycle around equity,” Syndio CEO Maria Colacurcio told GeekWire. “He’s really been committed to this for a long time. And that was really before the U.S. Women’s National Team stuff kicked up.”

She added that Penny Jar and Curry offer a different look on Syndio’s cap table and that Curry is already very involved.

“He’s not just putting his name on something and then backing away,” Colacurcio said.

Colacurcio referenced a piece Curry wrote in The Players’ Tribune in 2018, in which he said he took pay equity personally as the father of two girls who wanted to grow up “knowing that there are no boundaries that can be placed on their futures” … “believing that they can dream big, and strive for careers where they’ll be treated fairly.”

Curry said that fair pay is long overdue and a fundamental issue that needs to be addressed to “progress towards an equitable society.”

“Syndio is an objective solution that removes unconscious bias from the equation and changes the way business leaders tackle workplace equity, making pay equity the standard for companies around the world,” he said in a news release.

Maria Colacurcio of Syndio during the GeekWire Elevator Pitch finals at the GeekWire Summit in Seattle in 2019. (GeekWire File Photo / Dan DeLong)

Syndio’s so-called EquityTech software analyzes salaries, rooting out discriminatory differences in pay that are tied to gender, race, ethnicity or age while providing strategies for fixing those disparities. Of its 160 clients, 40 are in the Fortune 500 and companies include Nordstrom, Salesforce, Slack, General Mills and others. The startup’s software is being used to analyze the pay of 2.6 million employees.

And while the problem Syndio is tackling is an obvious attraction for investors like Curry, Colacurcio said the company’s success is also a big draw.

PREVIOUSLY: NBA star Steph Curry sounds off on robotic referees, Colin Kaepernick, the election and sports tech

Curry is invested in companies such as Miro and Guild Education, which Colacurcio called “massive, successful, SaaS companies,” and previous Syndio investors Bessemer Venture Partners and Emerson Collective are also invested in Guild Education, an upskilling platform.

Syndio meanwhile has seen revenue double from Q1 to Q2 of this year and its year-over-year revenue has tripled.

“Penny Jar really did their diligence with us and I was impressed actually, they did their homework,” Colacurcio said. “What we don’t want to have happen is for this to be construed as just a social impact investment. Obviously our missions are very well aligned, but a big part of this was just purely the momentum as a business that we’re having.”

Colacurcio credits three things that are driving that momentum:

  • The ESG movement around environmental, social, and governance investing. Colacurcio said the S is “squishy” and companies are struggling to figure out how to commit to the S in an actionable, calculable way and pay equity fits that bill.
  • Pay equity is becoming table stakes from an employer brand perspective and to be competitive, employees are engaging in “Google Docs activism,” Colacurcio said, where they’re sharing their salaries and they’re talking about it.
  • It’s not just a gender issue, but a race issue as well. “That was really interesting to Stephen because he’s been looking at this way back when we all talked about it as a gender issue,” Colacurcio said. “So when we started telling and sharing with them that 98% of our customers look beyond just gender and to race as well, that was really interesting to [Penny Jar]. They were like, ‘Wow, they’re actually attacking racial and gender inequity in companies and giving companies a way to prevent these issues from happening.’”

Syndio just released a new tool called Pay Finder, which helps companies guide discretion and eliminate bias in starting pay and promotions.

Data scientist and law professor Zev Eigen launched Syndio in 2017; Colacurcio joined in 2018. Syndio won GeekWire’s Elevator Pitch competition in 2019 and the startup now employs close to 70 people and is hiring.

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Source: https://www.geekwire.com/2021/nba-superstar-steph-curry-just-invested-seattle-pay-equity-startup-syndio/

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This startup is getting ready to launch running shoes based on how fast you run a mile

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Vimazi shoes are expected to hit the market this fall. (Vimazi Photo)

Vimazi, a Portland, Ore.-based shoe startup which pairs runners with shoes that match their running pace, has raised $600,000 in seed funding to help launch its high-tech footwear later this year.

The funding will help spur the first round of production, said Scott Tucker, co-founder and CEO of Vimazi. The company declined to provide details on investors.

Vimazi calls its custom midsoles FastPods. They respond to the different speeds of a runner to provide better cushioning and “maximum energy efficiency,” according to the company. FastPods are designed to work in sync with a runner’s pace to move more efficiently, and the heel and forefoot pads are tuned separately, accounting for differences in impact and propulsion forces.

“We discovered that because the forces under your foot change in this very precise way according to how fast you run, that we could use that to engineer a shoe that’s going to perform better,” said Tucker, a competitive runner and shoe industry veteran.

Customers purchase Vimazi shoes based on their running pace. There are six models which cover the range of speeds from 5-to-30 minutes per mile. They will sell for $160.

Before the shoes are available to purchase in this fall, Tucker said the company will publish several scientific papers outlining the engineering and physics to verify how the shoes work.

Vimazi co-founders John Zilly (left) and Scott Tucker. (Vimazi Photos)

Vimazi invented pace-tuned technology, and it is patent pending, Tucker said. Running footwear is a large market, so the startup has many big name competitors, but Tucker isn’t concerned.

“Nobody else has it,” Tucker said. “Furthermore, competitor brands will find it hard to meet the pace-tuned challenge, because they are built on legacy models and claim that every shoe is suitable for every runner. Vimazi says that each runner has specific needs, and that you can meet those needs with pace-tuned shoes.”

The idea of running shoes that provide “energy return” has been around for several years, and some models from brands such as Brooks and Nike tout unique cushioning systems. Nike’s ZoomX Vaporfly sparked controversy after elite marathoners broke world records using the shoes, which feature foam that reportedly acts “almost like leg muscles” to prevent fatigue.

John Zilly, Vimazi co-founder and chief marketing officer, said the tech Vimazi has introduced is a “logical jump forward” for the shoe market.

“There’s no reason all running shoes shouldn’t be tuned by pace in the future,” Zilly said. “All walking shoes as well.”

(Vimazi website)

Vimazi also has an app, RunCrush, which helps users create a training plan based on age, gender, current fitness and goal. Other footwear brands have done the same, including Adidas, Under Armour, Asics, and Nike.

Tucker said Vimazi products will enter the market both directly to the consumer through e-commerce and traditional retail channels. The shoe release will begin in the U.S., but Tucker said there is global interest in the product.

Travel restrictions and supply chain disruptions caused by the pandemic may push the company’s launch date back. However, Tucker said the pandemic also created more of an interest in running, so the timing of Vimazi’s product launch was “auspicious.”

“People are returning to in-person running races, marathons, that sort of thing,” Tucker said. “So it gives us opportunity for exposure right upon launch.”

Tucker has completed five of the six World Marathon Majors and previously led the running shoe and triathlon branch of biking giant Pearl Izumi. Prior to that, he was president of trail-running brand Montrail, which was acquired by Columbia Sportswear in 2006. He also led running shoes at Scott Sports. Zilly previously ran marketing agency Milepost59.

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Source: https://www.geekwire.com/2021/startup-getting-ready-launch-custom-running-shoes-based-fast-run-mile/

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