Dive Brief:
- San Francisco-based builder Webcor has joined a list of general contractors with in-house funding arms via Webcor Ventures, a new entity designed to further the construction firm’s investment in emerging construction solutions, it announced on Nov. 15.
- Webcor Ventures placed its inaugural investment in Oakland, California-based modular construction firm R2 Building, according to the news release. Webcor acquired a 10% stake in the business, according to Rochelle Buckner, communications manager for the contractor.
- Webcor said the investment aligns with its commitment to innovative and sustainable building methods that address key industry challenges such as efficiency and productivity, affordability, speed to market and labor shortages, according to the news release. It follows in the footsteps of other builders with venture capital arms, such as Boston-based Suffolk, which runs Suffolk Technologies, and Redwood City, California-based DPR Construction, which owns WND Ventures.
Dive Insight:
Webcor makes this investment as the North American modular construction market is projected to grow from $21.49 billion in 2023 to $34.82 billion by 2030, according to the news release.
R2 Building bases its construction model on cruise ship construction, according to its website. The firm recently launched its Type I non-combustible steel building system for high-rise construction, which features prefabricated foundations, unitized stair towers, elevator towers and mechanical shafts, along with full pre-outfitted apartment models, according to the release.
“Randy Miller and the team at R2 Building bring a wealth of knowledge and experience in the highly complex market of industrialized construction," said Matt Rossie, Webcor’s president and CEO, in the release.
Webcor's involvement will allow both companies to scale their efforts while benefiting from shared expertise, according to the builder.
However, the field isn’t without its pitfalls — while modular construction presents fewer jobsite hazards than traditional building, it isn’t entirely without risk. Contractors looking to incorporate modular building into their workflow can encounter a difficult learning curve and issues throughout the fabrication process, such as design, assembly and transportation.
Additionally, the failure of modular building giant Katerra in 2021 sent shockwaves through the industry and served as a warning about the pitfalls of modular construction.
