On Tuesday, affordable housing startup Factory_OS announced that it has successfully wrapped a Series B venture capital round of $60 million, bringing in JPMorgan Chase and French materials firm Saint Gobain as new investors, joining lead impact investor Lafayette Square and existing technology and finance partners. The new funds will be used to deploy Factor_OS digital and robotic technologies, launch new R&D innovations in building materials with key supply chain partners, and complete its vertical integration with general contractors and housing developers.
Factory_OS recently opened a second factory in Mare Island, California, to accelerate production and meet a surge in demand for affordable housing units as widespread shelter-in-place mandates due to covid-19 underscored the importance of affordable housing as critical infrastructure.
Since it was established in 2017 with the aim of solving the affordable housing crisis on the West Coast, Factory_OS has produced more than 1,000 apartments while reducing the cost and time of delivering affordable housing by up to 40 percent. According to the company’s Tuesday announcement, Series B investors praised Factory_OS for its “multilayered social impact model,” combining affordable housing production with reduced carbon emissions, improved sustainability, and the generation of living wage jobs. Factory_OS, which partners with the Northern California Carpenters’ Union, has a 100 percent unionized workforce, which it says benefits from 50 percent higher wages, 25 percent fewer safety incidents, and 65 percent less commute time compared to the metro area construction industry.
“We’re excited to invest in Factory_OS’s innovative vision as part of JPMorgan Chase’s efforts to promote housing affordability and build an economy that works for more people,” said Erin Robert, Head of Impact Finance at JPMorgan Chase, which invested in the Series B round for the first time. “Housing is the launching pad to resilient neighborhoods, well-paying jobs, and stronger financial futures for families. Factory_OS has the power to disrupt the traditional housing construction system so that more families have an affordable place to live.”
Disrupting wallboard!
As part of the Series B round announcement, Factory_OS announced that it will partner with major building materials companies on R&D initiatives to develop new building materials and processes that support industrialized construction. Its premier partnership is with French-headquartered global materials multinational Saint-Gobain
“Innovation and sustainability are the heart of Saint-Gobain as we work to make the world a better home,” said Minas Apelian, Vice President, External and Internal Venturing at Saint-Gobain. “By investing and partnering with Factory_OS, we are supporting innovation in offsite construction, while also driving environmental and social impact, with a team dedicated on building energy efficient, affordable homes for all.” Saint-Gobain’s investment was made via NOVA, its corporate venture capital arm.
Commenting on the round, Factory_OS Co-CEO/COO Larry Pace noted that significant production time improvements in the factory are feasible when materials are designed specifically for 21st century industrialized construction.
“Invented in 1916 and not changed substantially since, it’s about time we bring the industry’s best and brightest together to re-invent wallboard, in addition to other key building materials and processes, for our technologically advanced construction method at Factory_OS,” Pace said. “We’re very proud of our new partnership with Saint-Gobain, the world’s largest and oldest building materials company.” Factory_OS plans to launch a supply chain partnership initiative to attract other gold standard companies in the building materials sector that are interested in investing in the transformation of the construction industry from on-site to off-site. The investment of global building materials suppliers signals to the broader industry that their sector is in the process of major transformation and those not retooling for the future may be left behind.
“We’re excited to see additional partners across finance, building materials and technology come together for continued support of Factory_OS, its innovative model to build affordable housing sustainably, and its mission to confront the national housing crisis within the communities where we live and work,” added Damien Dwin, CEO and founder of Lafayette Square.”
