Lennar Acquires Struggling Proptech Veev at Huge Discount

Lennar has picked up the remnants of Veev, a modular building startup based in San Mateo that shut down last month after raising nearly $600 million and hiring up to 400 workers.

The Miami-based homebuilding giant bought the proptech firm once valued at $1 billion for “several dozen million” dollars, the San Francisco Business Times reported, citing Calcalist, a business newspaper in Israel, which first reported the news. Terms of the deal were not disclosed.

The deal closed Dec. 21, according to Pitchbook. Danielle Tocco, spokeswoman for Lennar, confirmed the acquisition in an email to the Business Times, but declined to give further details.

Veev, founded in 2008 by Amit Haller, Ami Avrahami and Dafna Akiva, aimed to revolutionize homebuilding with its proprietary, prefabricated panel home building system.

The idea was to produce components for residential projects — walls, ceilings and floors, with electrical and plumbing installed — and assemble them at a project site, cutting construction timelines and labor costs.

Veev once claimed its modular system could build housing four times faster than traditional construction.

LenX, Lennar’s venture arm, led Veev’s $75 million Series B in 2020, and was an investor in the $400 million Series D round that propelled Veev to unicorn status last year. In March 2021, It raised $100 million through a Tel Aviv Stock Exchange platform.

But then storm clouds arose when the firm, then based in San Mateo, announced in November of last year it would lay off 100 workers, or 30 percent of its staff, as it pivoted to building low-slung homes instead of high-rise buildings. It called the layoffs a “strategic decision.”

The one-time darling of the construction world then announced last month it would be shutting down, laying off 140 workers, having failed to raise enough capital to continue.

It was a blow for Haller, its CEO, who shut down online home-selling site Reali last year, blaming real estate and financial market conditions, as well as an “unfavorable capital-raising environment.” The company raised $250 million in a Series B round announced in August 2021.

Veev recently told lenders that it couldn’t make interest payments on California property acquisitions financed through debt, blaming the economic environment and declining real estate prices in the state. The firm isn’t making payments until the assets are sold.

Veev was part of a wave of affordable housing startups that gained enthusiasm during the boom years, envisioning mass production of new homes through prefabricated components and standardized building processes.

While many of these startups’ initial products are innovative, they are far from actually being affordable.

It wasn’t clear Thursday whether Veev, under Lennar’s ownership, would operate as its own unit or be folded into Lennar’s other operations.

After Veev shut down, some in the proptech community said that its switch to single-family homes may have played a role in its demise, according to the Business Times.

During the shift, Veev moved its headquarters to Hayward, where it began operating out of 507,000 square feet at 2701 West Winton Avenue. It planned to make enough panels to produce one to two homes per day. It’s not clear what might become of the plant, subleased from Amazon.

— Dana Bartholomew