Courtesy Dvele

San Diego-based offsite modular home builder Dvele raised $14 million in Series A funding, with a big push of support from real-estate investment company Crescent Real Estate LLC.

The investment--which Dvele says will "fuel the build out and commercialization of their digital platform for offsite home production"--follows a transformative pattern we saw emerge in the past year, of a growing capital stream flowing into offsite home building technology in a secular production environment where skilled labor and materials, time, and process costs have become too much of a wildcard.

While on the surface, investments of upwards of $1 billion in the Katerra start-up by Softbank Group Corp's Vision Fund dwarf others, we’ve seen an array of funding—from strategic real estate players, building manufacturers, financial investors, and tech giants—all targeting capital at the highly obstinate throes of architecture-engineering-and-construction gridlock that accounts for at least part of why it costs so much to develop and build new homes and communities.

In a rather quick succession of months last year, on the single-family side alone we saw LP commit $45 million in a venture with Northern California start up Entekra, which is now in construction of a new NorCal factory, and is producing completed single-family home enclosures at a yearly-run-rate of close to 1,000; Certainteed joined Bensonwood/Unity Homes in initiatives to co-develop software technology and coding to improve CNC automation and modularity; Amazon’s Alexa Fund joined in a $6.7 million Series A funding for Rialto-Calif.-based Plant Prefab, a custom, higher-end builder; and Austin, Tx.-based 3D-printed home builder ICON landed $9 million in funding, led by Oakhouse Partners, with an intriguing investment partner in D.R. Horton.

That’s not to mention a more than $1 billion-plus capital investment program Clayton Homes is carrying out nationwide to upgrade, retool, and improve team member conditions and environment in factories around the U.S.

While smart and experienced home building operators, building trades, and entrenched partners continue to express push-back to a notion many of them feel they have seen before and have seen fail repeatedly--with reactions ranging from amused skepticism to outright cynacism--money, talent, and development are pouring in to bringing technology and data, ever less-expensive and more-powerful microprocessing and sensors, to solve building design, development, engineering, and construction's challenge of bending its cost curve.

Kurt Goodjohn, co-founder and CEO of Dvele
Kurt Goodjohn, co-founder and CEO of Dvele

The Dvele narrative, which we've covered here and here, spotlights two all-important aspects of integrated offsite's value proposition: velocity and cost predictability. One of the big bets, of course, is on its attempt to profitably blend premium-level construction and finishes with "modularity," or standardization of key floorplan and elevation features into a kit of finite, interchangable parts.

Among residential building's most important, transformative issues we see getting focus in the next five years, as more and more investment capital bets on more material impact from technology, automation, robotics, machine learning or artificial intelligence

Here's details from the Dvele press statement yesterday:

Dvele, a technology company redefining how homes are designed and built, today announced that it has raised $14 million in their “Series A” round of funding led by real-estate investment company Crescent Real Estate LLC. The investment coincides with the opening of the company’s new headquarters in San Diego, Calif., where the company is developing the technology to ramp up production in their 75,000 sq. ft. production foundry. Dvele will use the funding to fuel the build out and commercialization of their digital platform for offsite home production that provides an effortless customer experience from ideation, design and engineering, all the way through permitting, fabrication, and the on-site construction required for full completion.

The company utilizes an innovative, hybrid business model for home fabrication under controlled conditions that provides a single stop for architecture, interior design, supply management for materials, general contracting, and delivery, removing unnecessary cost, time and stress from the process. Driving an experience revolution for home buyers, Dvele focuses on quality assurance, sustainability and the health and wellness of the homes they build. Dvele does this by using best practices in software automation, material selection and lean manufacturing techniques that have revolutionized other industries. Extreme energy efficiency and air-quality standards ensure a healthy, high-quality living environment that lasts a lifetime.

“Dvele is creating the template for a software-defined home and construction site that will change the expectations for how a home is built and delivered. We believe our customers should be able to order a home with the same ease and high end experience they expect in buying a luxury car brand or quality consumer electronics,” said Kurt Goodjohn, Dvele Founder and CEO. “The construction industry has been stagnant for decades. Prefabrication is essential for a future where our living environments reflect the world we want to live in: healthy, energy efficient, beautiful and built to last a lifetime.”

Funding will also support current projects to rebuild homes in Ventura, CA and Santa Rosa, CA, both communities that were badly damaged by wildfires. The projects, currently in development, will place new homes on sites where the previous homes were destroyed by the fires. The completed dwellings will be available for sale this summer without the inflated prices that often occur in an area that has been devastated by natural disasters. The expedited process for Dvele homes decreases rebuild time from over a year to six months or less, including design, build and move-in once permits are in place. The combination of an effortless experience to move in, price certainty and high-quality materials and design could be a boon to communities looking to quickly rebuild neighborhoods that have been impacted by these extreme natural events, getting people back into their homes in a faster, less stressful way.

“Traditional home building has been slow to innovate and hasn’t embraced the digital tools and factory efficiencies that have driven our overall economy for the last few decades,” said Conrad Suszynski, Co-CEO at Crescent. “As a real estate investment company and developer, Crescent’s focus is to continually improve the customer experience. We do that through enhanced technology and design to build better buildings and operate buildings more efficiently. This is consistent with Dvele’s mission to offer cutting-edge, sustainable homes using the latest technology.”

“Technology-driven home-building that improves the customer experience and delivers luxury, high-tech housing will be a significant turning point for the residential construction industry,” added Suszynski.

Dvele’s approach to homebuilding, design and delivery utilizes technology and manufacturing efficiency to simplify the process of moving a project from the customer’s dream to reality, with a single point of contact and quick turnaround. Prefabricated modules manufactured in the company’s foundry and delivered to the jobsite reduce the time from order to completion by as much as 70%.

The company will be aggressively hiring new team members for their new HQ in San Diego and serve as the technology, innovation, sales and marketing hub for the company.

Any serious question any longer about whether home construction is ripe for disruption?