When SoftBank-backed construction startup Katerra shut down in June, it was one of the most well-funded US startups ever to fold. And it hadn’t even come close to its goal of disrupting the construction industry with mass manufacturing despite burning more than $2bn in investor cash. 

But one startup’s failure is another startup’s gold. 

UK construction tech (contech) Modulous’s cofounder Chris Bone had his eye on talent at Katerra even before the company went bankrupt. When he got the news it was closing for good, he pounced. The company is now launching in the US with four alums from Katerra and a Seattle office. 

Bone tells Sifted that Katerra’s demise helped them launch in the US “probably six months quicker than we were going to”.

“We honestly feel that the US market will be bigger than the UK business very, very quickly.”

Janet Stephenson, who joined Katerra in 2017 to lead US sales and will oversee Modulous’s US team, says that Bone asked her to draw up a list of Katerra “rockstars” that she wanted to bring on board. That list included Jennifer Caldwell, Kassandra Mast and Eva Talbot, who are also Modulous US’s first employees.

After Katerra, Stephenson says that she “wasn’t necessarily ready to leap into an early-stage startup, but it became a very easy decision” given Modulous’s team and their business model. The fact that she and Bone bonded over a photo of a statue on her LinkedIn also helped.

Modulous’s US launch comes as European startups are looking for creative ways to expand into new geographies. That’s driven a rise in acquisitions of VC-backed startups by other VC-backed startups. That strategy is harder for earlier-stage companies like Modulous.

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