Construction giant Lennar acquires full control of former proptech unicorn Veev
Construction giant Lennar acquires full control of former proptech unicorn Veev
Veev, valued at $1 billion in March 2022, recently entered insolvency in the United States due to an inability to meet financial obligations to suppliers and employees under California state laws
American real estate giant Lennar has successfully acquired full control of the Israeli company Veev. The American company's offer to purchase the entire operation of the Israeli firm for an estimated several dozen million dollars was accepted on Wednesday night.
Veev, valued at $1 billion in March 2022, recently entered insolvency in the United States due to an inability to meet financial obligations to suppliers and employees under California state laws. Following the acquisition, two of Veev's founders, Ami Abrahami, and Dafna Akiva, have been let go. Lennar plans to retain the company's technological operations in Israel, with employees being informed of the developments on Thursday afternoon.
The takeover by Lennar, which is traded on the NYSE with a market cap of $41 billion, follows a three-week bridging loan it provided to Veev, with Lennar ultimately emerging as the sole bidder for the insolvent company. Although several entities expressed interest in the purchase, the tight three-week timeline meant no additional offers were made. Lennar was a significant investor in Veev prior to its liquidation.
In March 2022, Veev, which developed a system that leverages a proprietary panelized approach to produce fully cladded walls, complete with mechanical, electrical, and plumbing (MEP) solutions, reported a substantial $400 million funding round led by BOND, boasting a market capitalization exceeding $1 billion. However, a significant gap emerged between the reported agreement and reality. In practice, the company received only $200 million, with the second phase of funding slated for March 2023. The first phase aimed to establish a new manufacturing center to replace smaller ones, but amid rising interest rates and changing real estate dynamics in the United States, Veev pivoted away from high-rise residential construction, recognizing a demand shift towards private homes.
Following extensive discussions and an agreement with the board of directors, Veev decided to freeze high-rise construction activities and focus on private homes. Some major investors, including Lennar, subsequently announced they would not transfer their part of the second $200 million investment, proposing instead an internal fundraising round of $120 million to provide the company with a longer runway.
Veev executives, caught off guard by the cancellation of the second phase, reluctantly accepted the internal fundraising offer due to a lack of alternatives. However, the internal recruitment process, initially expected to be swift, encountered delays and was never completed.
Veev was founded in 2008 by Amit Heller, Ami Avrahami and Dafna Akiva. Heller and Avrahami are also behind Israeli-founded real estate platform Reali which ceased its operations last September.
Last year’s funding round was led by BOND with participation from LEN X, Zeev Ventures, Fifth Wall Climate Tech, and JLL Spark Global Ventures.
Veev raised $100 million through the Tel Aviv Stock Exchange’s TASE UP platform in March 2021. Investors included leading Israeli institutional investors, including Migdal Insurance, Psagot Investment House, More Investment House and Shavit Capital, all of which didn’t participate in the latest round.
