Startup Vallejo modular classroom manufacturer lands $11M series A, plans dozens of hires
A Vallejo startup manufacturer of modular classrooms designed to be sturdy enough to relocate multiple times and stack a few stories high on April 9 announced it landed $11 million in funding.
The series A round led by Goldman Sachs Urban Investment Group will help iMod Structures, formerly Intermodal Structures, finish outfitting a former Mare Island Naval Shipyard factory and ramp up staff, according to iMod co-founder Craig Severance. The company employs less than 20 now, mostly on the factory floor, but the goal is to hire 50–75 locally in the next 12 months.
“We’re in good shape, from a cash flow standpoint,” Severance said.
iMod has been in the 100,000-square-foot space at 251 Bagley St. for about a year and spent $1 million so far pouring a concrete floor, painting the dilapidated interior, installing LED lights and configuring a “flipper” rig provided by building master tenant XTK Engineering. That allows the 6-ton heavy steel moment frames for the modules to be turned 90 degrees so workers can horizontally install the ceiling high-performance ductwork and wiring instead of above their heads.
While iMod was waiting for the funding deal to be finalized in the last half of 2018, the company was turning out its first order. It delivered 12 iMod units to create a two-story office building (six modules on top of six ) for Long Beach Unified School District in Southern California.
While the installation is new, about half the units date back to origins of the company. It started as a decade ago as a joint venture of Dutch conglomerate A.P. Moller-Maersk, known for the Maersk name seen on vessels and containers around the world, Severance told the Business Journal last summer. The goal was to create prefabricated modular buildings that could be moved by various modes, with one use being disaster relief.
Since then, those modules have been relocated nine times and reconfigured three times, first into offices in Portsmouth, Virginia, then as classrooms for a 2016 trade show in Sacramento for school construction and finally as the school district offices.
The rough cost of the iMod units is $250–$350 a square foot for 40-foot-long, 320-square-foot modules with basic interior and exterior finishes, excluding things such as transportation and site costs.
The cost savings for a company that leases modules to districts comes from being able to easily move them from one school to another as enrollment changes without significant damage and in lower maintenance, Severance said. A big existing market is to replace tens of thousands of aging California modular classrooms installed two or three decades ago.
If demand warrants, the plant is being configured to turn out an average of a module per work day and, perhaps, two as efficiencies increase, he said.
Joining iMod’s board through the funding deal are Sherry Wang, managing director of the Goldman Sachs group, and Laurence Pelosi, who invested through his Forty Six North Advisors. They join iMod founders Severance, John Diserens in charge of operations and Reed Walker overseeing product development.
Wang said in the announcement that her funding group has been committed to “closing the opportunity gap.”
“Given technology is transforming nearly every part of our lives, our nation’s classrooms should be no different,” Wang said. “… We are hopeful that their innovative re-architecting of classrooms from the ground up will create modern learning environments for all students, in every neighborhood.”
Pelosi is a nephew-in-law of U.S. House Speaker Nancy Pelosi and cousin of California Gov. Gavin Newsom. He’s also a partner in Thompson Dorfman, a Marin County-based multifamily housing developer. Earlier in his career, he oversaw Northern California acquisitions for Lennar Corporation, one of whose ventures has been redeveloping the former Mare Island Naval Shipyard.
Los Angeles-based Manatt, Phelps & Phillips advised Goldman Sachs on the funding.