After burning through $2 billion, Katerra gets a $200 million SoftBank lifeline to escape bankruptcy [TechCrunch]
SoftBank Group is reportedly investing $200 million to bail out Katerra, a startup that had hoped to remake the construction industry with a vertically integrated approach, according to a report in The Wall Street Journal.
Katerra’s shareholders reportedly approved the new investment on Wednesday, with the new lifeline from SoftBank coming on top of roughly $2 billion that the Japanese technology conglomerate had already committed to the venture.
Funds for the bailout, which will save Katerra from bankruptcy, will be coming from SoftBank’s Vision Fund 1, the Journal quoted Katerra chief executive Paal Kibsgaard as telling company shareholders in a message.
As part of the funding, the SoftBank-financed financial services firm, Greensill Capital, is cancelling around $435 million in debt in exchange for a 5% stake in the company, according to the Journal’s reporting.
This new bailout actually marks the second time that SoftBank has stepped in to dole out $200 million to Katerra this year alone.
In May, when Kibsgaard, the former head of oil services developer Schlumberger, was brought in to fix the company’s finances, SoftBank poured $200 million into the company so Kibsgaard could right the ship there, according to the Journal’s reporting.
Despite its missteps, Katerra is on track to make serious cash this year, with revenue between $1.5 billion and $2 billion, according to details Kibsgaard gave to the Journal.