Katerra

Katerra's 2021 bankruptcy destroyed $2 billion in invested capital in a construction technology company that was supposed to revolutionize building through vertical integration and modular construction. SoftBank's Vision Fund led multiple funding rounds; the company acquired architectural firms, factories, and materials suppliers. But construction proved harder to disrupt than software. The mechanism failure was Silicon Valley thinking applied to construction physics. Katerra tried to move fast and break things in an industry where moving fast literally breaks buildings. The company's modular factories couldn't achieve costs below traditional construction; quality problems plagued projects; acquisitions didn't integrate. Software could be iterated; buildings couldn't. The company also suffered from scope creep. Rather than perfecting one aspect of construction, Katerra tried to revolutionize everything simultaneously—design, materials, manufacturing, assembly. Each business line competed for management attention and capital. The vertical integration that was supposed to provide advantage created complexity that exceeded management capacity. Katerra became a cautionary tale about SoftBank's Vision Fund, which invested over $1 billion in the company. The promise of construction disruption remains, but Katerra proved that capital alone can't overcome physics and complexity.