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Prefab Tech
Overview
Prefab gains ground as a sustainable construction technique
Prefabricated construction (prefab) is the manufacture and assembly of building components in an off-site factory which is then transported to construction sites as complete structures or sub-assemblies. This technique is traditionally known for low-cost, low-quality buildings; however, thanks to digital designing tools, advancements in 3D printing, and robotics, it is now becoming a mainstream sustainable construction solution, delivering fast, high-quality results.
A growing number of startups are coming up with prefab techniques to build all types of structures, including single-family and multi-family residential units as well as commercial buildings. By utilizing fewer resources, generating less waste, and incorporating energy-efficient features into buildings, the aim is to achieve sustainable long-term savings and reduce the environmental impact of construction.
Industry Updates
Market Sizing
The US Prefab Tech market could reach USD 40.0 billion–58.8 billion by 2028
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Market Mapping
Residential buildings dominate
While a few startups operate in multiple segments, a majority specialize in just one. The single-family residential units segment has the highest number of startups, as demand has increased due to remote work becoming the norm. This also stems from the growing need for privacy and the preference for living in suburban or rural areas.
Incumbent traditional modular housing developers only operate in residential and commercial buildings segments and are yet to move into emerging areas such as 3D printing and sustainable mobile houses.
While most startups are at the go-to-market and expansion stages, sustainable mobile houses and fully 3D printed buildings are at the minimum viable product stage as they are still emerging technologies.
Single-family residential units
Multifamily residential units
Prefabricated commercial buildings and structures
Accessory dwelling units (ADUs)
3D printed buildings
Sustainable mobile houses
The Disruptors
Speed to market is crucial for leading disruptors
3D-printed house developers ICON, Mighty Buildings, and commercial buildings and structures developers Prescient and Nexii dominate the industry in terms of funding, potentially owing to the relatively high level of capital investments required. Startups in this space distinguish themselves through proprietary construction methods that aim to cut down on build times and labor costs. For example, Mighty Buildings claims it is capable of developing a 350-square-foot home within 24 hours, whereas others typically take a few weeks or months.
While most companies offer standard floor plans with varying degrees of customization, some startups, such as Dvele, S2A Modular, and EcoCraft Homes, offer fully customized prefab houses. In terms of sustainability, most disruptors offer in-built energy generation facilities, while companies like Connect Homes incorporate third-party solutions at the customer’s discretion.
Funding History
Competitive Analysis
Incumbents
Traditional house developers move into prefab through acquisitions and in-house innovation
Most incumbents started out as providers of manufactured houses (movable houses, trailer homes, etc.) built on chassis and have been in business for more than 50 years on average. These companies moved into the prefab industry through a mix of acquisition and in-house development to pursue increasing demand for sustainable construction. A majority of these incumbents conform to most of the green/sustainability certifications.
Out of the incumbents, only TriWest Capital Partners has developed proprietary technology, whereas most disruptors have developed their own technology, covering various aspects such as designing, building systems, material, etc.
Notable Investors
