Vallejo’s Factory_OS gets $17M from Google, Autodesk to build thousands of affordable apartments
About two years after it opened its cavernous plant on Vallejo’s Mare Island, Factory_OS has expanded its production facilities by 50% and workforce by 25%, fueled by new funding to turn out orders for thousands of modular apartments.
At midyear, the 5-year-old startup factory residential unit builder received $17 million from Silicon Valley-based Google and Autodesk, according to CEO and co-founder Rick Holliday. In an earlier round in mid-2019, the San Rafael-based design software maker and global bank Citi had contributed to a combined $22.7 million round of funding.
“We’ve gone from a brand new startup to functional and now from functional to stable,” Holliday said. Revenue is on track to end this year with $80 million in revenue and is projecting $150 million next year. The company received a $40 million deposit for six projects to be built in 2021–2022.
With the second round of capital, Factory_OS hired 100 workers and in September started operating in a 125,000-square-foot former shipbuilding facility at 1275 Nimitz Ave., located a block behind its existing 250,000-square-foot plant in Building 680.
And in the next six months, the company plans to add robotics, unveil three new funders and roll out plans for a multibuilding housing research, development and production campus connecting the two facilities.
“We’re doubling down on Mare Island,” Holliday said. “Demand for what we’re doing is increasing.”
Faster, less-expensive homebuilding
Factory_OS produces multifamily housing in modules that can be trucked to the job site and hoisted into place like Lego blocks. Housing per module can range from 300-square-foot microstudios to 1,000 two-bedroom units, but larger units can be created with multiple modules. Average unit sizes built so far have been 400 square feet for studios, 600 for one-bedroom flats and 800 for two bedrooms.
The “OS” in the company name is said to refer to both “operating system” for the high-technology approach to housing construction and to “off site” for factory-based homebuilding.
By framing, plumbing, wiring, insulating, wallboarding, painting and finishing the units in the factory, the company said it currently can cut 25%–30% off the cost of constructing the dwellings at the project location, which can be $700,000–$800,000 a unit in downtown San Francisco and Oakland.
Other touted benefits for factory homebuilding are 40% faster project completion and 70% reduction in materials waste.
In two or three years after automation is added and other efficiencies are realized, the company’s goal is to achieve savings of 60%–70%, Holliday said.
Its long-term strategy involves turning out tens of thousands of affordable-housing units this decade. With the two factories fully running within two months, the company expects output to be 2,000 modules annually, each module containing an average of 1.5 housing units.
Building houses the way cars are
Working with Autodesk and getting input from housing factories around the world, Factory_OS has set up production to approximate an automobile plant.
Lumber is pre-cut to needed lengths, and subassemblies of walls and floors are prepared in the wings of the factory buildings, while the modules are assembled as they move down the length of the towering center aisle, the way submarines did in Mare Island’s days as a naval shipyard.
“The advantage of building a house like a car is you can do a lot of things at the same time,” Holliday said.
And these tasks can be completed without the job-site limitations of daylight and the elements.
Using a blend of Autodesk’s BIM 360 building information modeling software and proprietary code, Factory_OS compiles data and images of how each housing module, or box, is built as it moves through the facility. That way, construction crews and maintenance crews can scan a QR code stamped on each box to pull up as-built plans and pictures of what the inside of walls look like, to help with later jobs such as installing seismic bracing or stopping leaks.
Several projects under construction
The company has produced over 1,000 units already and has several projects in production, including affordable housing around the Bay Area and employee housing for Google.
Completed modules for these projects have been accumulating on Mare Island, awaiting their turn to ride to the job site for assembly.
One project finished recently is the 110-unit The Union in Oakland. Though the initial assembly of modules happened in just 10 days, the timeframe for completion was pushed back four months because of limited availability of city building inspectors during the coronavirus pandemic, Holliday said. As a builder of affordable housing, Factory_OS is deemed an “essential” business and has been allowed to operate with worker-health precautions.