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Was Veev just a scam or they just spent the money too freely?

Climber

Climber

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Bay Area home-building startup once valued at $1B to suddenly shutter

How do you burn up $600 Million and only build 2 homes, in the end?

Doesn't it seem like there is a bunch of money in offshore accounts somewhere?
Veev, a Hayward-based company that raised hundreds of millions of dollars to “reimagine the home experience from the ground up,” is preparing to shut down.

Veev’s latest attempt to raise money failed “due to the macroeconomic environment,” the Bay Area startup’s spokesperson, Drew Chapman, wrote in a statement to SFGATE on Monday. He added that the house-building company would now undertake “an assignment for the benefit of creditors process,” which are bankruptcylike proceedings to liquidate a company’s assets.

The closure comes about a year and a half after Veev raised $400 million from investors, and less than two weeks after Veev CEO Amit Haller gave an interview to the Associated Press in which he gave no indication that his company would soon be going under. “There’s room for everyone, including the traditional industry, because the [housing] shortage is so serious and so real that it’s not going to be a one-company fix,” Haller said in the Nov. 16 interview, per AP.
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Sounds like that guy at Netflix that took tens of millions to NOT make a series for them....but did manage to get some nice cars and other toys. Weird. ;)
 
A lot of startups exist just to fleece investors and/or launder crypto.
 
I'll wait for the AppleTV series, but it may be a while, I don't have AppleTV....

But, here's a clue: if you go the HQ and they have a gourmet chef, hot tubs, pool and foosball tables, 6 top of the line espresso machines, and they all have Patagonia, HH, Kuhl, or Fjallraven fleece vests just, turn, around.
 
Their idea of manufacturing house walls that lock together at the job site is stupid.
It’s been proven over and over that the buying public only wants stick built homes constructed from the ground up.
Modular homes have been around for decades and are the same concept as Veev.
There are also Manufactured homes that are basically trailers on a fixed foundation.
Neither of these concepts has ever taken off and some lenders won’t accept them for a mortgage loan.
 
Johndicezx9 said:
I'll wait for the AppleTV series, but it may be a while, I don't have AppleTV....

But, here's a clue: if you go the HQ and they have a gourmet chef, hot tubs, pool and foosball tables, 6 top of the line espresso machines, and they all have Patagonia, HH, Kuhl, or Fjallraven fleece vests just, turn, around.
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Bro-

You are describing the Bio-Tech firm near my home. It belonged to the lady who was sent to prison for scamming investors; Theranos.
 
I'm sure it's no secret where the money went, you can't be a tech CEO without a massive salary and a private jet.
 
Climber said:
Bay Area home-building startup once valued at $1B to suddenly shutter

How do you burn up $600 Million and only build 2 homes, in the end?

Doesn't it seem like there is a bunch of money in offshore accounts somewhere?
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It isn't hard at all, do you understand what they were trying to do?

It was a complete redesign of the housing industry based on prefab wall structures with MEP fully installed.

I am assuming the manufacturing model they were trying to develop for this prefab MEP system simply failed.

There has been a ton of threats in the last decade or so to revolutionize building housing with prefab structures, but so far there appears to be very limited success.

My company has built a couple of buildings using a different model, prefab rooms that are crane lifted into place rather then just a wall and I can say the result was not great.

You spend a bloody fortune trying to fix alignment issues in the structures and don't really have any savings on what is supposed to be a reduced labor cost.

I think there is opportunity here for a company that can get the designs down, but building like this is still in its infancy and a lot of money is being spent to try and be the one who figures it out.
 
I got a chance to meet this group briefly. I was intrigued by their business model, but prefab has always been a unicorn in the building industry. There are a lot of reasons why and many of them are pretty lame. But getting back to Veev as a business entity...the person I was supposed to be reporting to for my endeavor changed at least a couple of times in a matter of weeks. It seemed a little chaotic behind the scenes, to say the least. It was so messy that I felt a little bad for them... was like watching a cow try to swim out of quicksand.
 
Eldritch said:
It isn't hard at all, do you understand what they were trying to do?

It was a complete redesign of the housing industry based on prefab wall structures with MEP fully installed.

I am assuming the manufacturing model they were trying to develop for this prefab MEP system simply failed.

There has been a ton of threats in the last decade or so to revolutionize building housing with prefab structures, but so far there appears to be very limited success.

My company has built a couple of buildings using a different model, prefab rooms that are crane lifted into place rather then just a wall and I can say the result was not great.

You spend a bloody fortune trying to fix alignment issues in the structures and don't really have any savings on what is supposed to be a reduced labor cost.

I think there is opportunity here for a company that can get the designs down, but building like this is still in its infancy and a lot of money is being spent to try and be the one who figures it out.
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Years ago (in the 80's), I installed several pre-fab houses developed in Canada, in New Hampshire. So I do have some experience with pre-fab.

These people burned through a ton of money with almost nothing to show for it. I don't think the idea is bad, but I think it's a bunch of nerds trying to figure out how to do a blue collar industry and most of them probably have little knowledge of actual building. Now, that is speculation, but I don't think I'm far off the mark.

I also think that they probably rewarded themselves extensively, I've been involved in some start-ups where the CEO lived a wonderful life and burned up $$$$$$ doing so.
 
Climber said:
Years ago (in the 80's), I installed several pre-fab houses developed in Canada, in New Hampshire. So I do have some experience with pre-fab.

These people burned through a ton of money with almost nothing to show for it. I don't think the idea is bad, but I think it's a bunch of nerds trying to figure out how to do a blue collar industry and most of them probably have little knowledge of actual building. Now, that is speculation, but I don't think I'm far off the mark.

I also think that they probably rewarded themselves extensively, I've been involved in some start-ups where the CEO lived a wonderful life and burned up $$$$$$ doing so.
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Well, when you talk about 2 homes, built, I don't know how much they invested in Building/Manufacturing facilities, right?

You need to remember, this is not a home building company, this is a Home Building Materials Manufacturing company.

It is easy to spend $500 Mill on that factory equipment pretty quick, especially with new Tech that probably has QA issues that need to be addressed and what is worse, spread across a wide variety of customization factors.

For example, the Berlin Tesla Factory, which is only building like half a dozen of the same finished products, cost $5 billionish.

For these guys, their product seems kind of risky to me anyway. I know one of those houses they built went to market for something like $9m.

Trying to manage scope and scale to manufacture like that, one must assume they don't want to ONLY build luxury homes with their prefab products, can be something that burns a lot more cash than you had hoped, add in an interest rate crisis in the industry starting in 2021 and voila, failed venture no wild stories of excess corruption.

:dunno
 
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Nerds trying to "disrupt" the norm - sometimes it works.

In 2016 I went to work for a startup (Lendinghome.com, now Kiavi) that was started by a 25-year-old who had gotten a mortgage and thought he could streamline the process. No experience in mortgage lending or construction but he successfully built Lendinghome into the largest or second largest fix and flip lender in the US by the time I left in 2019.
So sometimes it works out.

The engineering side was solid but the ops side was full of recent college grads with lots of enthusiasm but not much else.
The management style was communal with meetings after meetings where nothing got decided because no one had any real authority, except to schedule another meeting.
The fun part was when these "kids" came up with what they thought was a great new idea only to find out from us old timers that the same thing was tried and had failed 20 years ago.

Still, the business took off and became really successful.
 
Eldritch said:
Well, when you talk about 2 homes, built, I don't know how much they invested in Building/Manufacturing facilities, right?

You need to remember, this is not a home building company, this is a Home Building Materials Manufacturing company.

It is easy to spend $500 Mill on that factory equipment pretty quick, especially with new Tech that probably has QA issues that need to be addressed and what is worse, spread across a wide variety of customization factors.

For example, the Berlin Tesla Factory, which is only building like half a dozen of the same finished products, cost $5 billionish.

For these guys, their product seems kind of risky to me anyway. I know one of those houses they built went to market for something like $9m.

Trying to manage scope and scale to manufacture like that, one must assume they don't want to ONLY build luxury homes with their prefab products, can be something that burns a lot more cash than you had hoped, add in an interest rate crisis in the industry starting in 2021 and voila, failed venture no wild stories of excess corruption.

:dunno
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Proof of concept usually gets done on a smaller scale.

Perhaps with $600 Million (or $400 million last year) they skipped the proof of concept stage and went straight to production. Still, there are plenty of ways to scale up something like that. I would have expected them to build frames to efficiently manufacture wall sections, it's not rocket science, it's just building the sections in an environment where you can get it done in a faster, cheaper manner. The problem is that you'd still have to do finish work where the parts came together.

I still think they wasted a bunch of money in one manner or another unnecesarily.

Interesting that one of the two houses they built was a $9m mansion, seems like if there is any class of people who don't want a home built in this manner, it would be that group.
 
Climber said:
Proof of concept usually gets done on a smaller scale.

Perhaps with $600 Million (or $400 million last year) they skipped the proof of concept stage and went straight to production. Still, there are plenty of ways to scale up something like that. I would have expected them to build frames to efficiently manufacture wall sections, it's not rocket science, it's just building the sections in an environment where you can get it done in a faster, cheaper manner. The problem is that you'd still have to do finish work where the parts came together.

I still think they wasted a bunch of money in one manner or another unnecesarily.

Interesting that one of the two houses they built was a $9m mansion, seems like if there is any class of people who don't want a home built in this manner, it would be that group.
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If I had to guess, you are probably right. I suspect they tried to go directly into manufacturing and probably tanked there, but as you say, you can see how if you didn't take the right slow steps and just tried to run, costs could way overrun in very short order.

A lot of this is speculation on my part, I haven't looked that deep into them, just saw the business model and assumed from there, so if anybody actually was involved with them (I think DH said she was briefly) I would love to hear more. .
 
The failed because of the $500/ ft (est.). That's the low end and the only unit I saw produced was the $8.5M (same as referenced above) 5,400 foot unit. $1575/ ft isn't a good sales pitch. Building that as their showpiece was a bad idea. Like Bluehomes, they built outside their customer's price point.
 
Holeshot said:
The failed because of the $500/ ft (est.). That's the low end and the only unit I saw produced was the $8.5M (same as referenced above) 5,400 foot unit. $1575/ ft isn't a good sales pitch. Building that as their showpiece was a bad idea. Like Bluehomes, they built outside their customer's price point.
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I mean, $500 a foot wasn't their entry point was it?
 
Best I can tell, that was the target.
 
Holeshot said:
The failed because of the $500/ ft (est.). That's the low end and the only unit I saw produced was the $8.5M (same as referenced above) 5,400 foot unit. $1575/ ft isn't a good sales pitch. Building that as their showpiece was a bad idea. Like Bluehomes, they built outside their customer's price point.
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Interesting.

During the dotcom boom, the one characteristic of the majority of people who got the money was massive over-optimistic projections of profits and under estimates of the cost of building and operating the company. Some of the estimates that I heard were completely unachievable, but greed can be a compelling emotion to get people to put money down. Many of them didn't understand the technologies and/or industries, but the numbers they were presented gave them hard-ons.
 
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