Austin-based Icon, one of the biggest players in 3D printed real estate, is announcing its $200 million Series D financing co-led by Baillie Gifford and funds managed by BlackRock, among others. That brings total funding to $700 million, with the company reporting a $1.4 billion valuation.
The funds come on the heels of its latest technology, the Titan multi-story robotic 3D construction system, which launched commercially in March of this year. Previous Icon technology could build only single-story structures. The Titan also reduces the average time to build a home by six weeks, reduces the number of workers needed and lowers overall costs by 40%, according to Icon.
"We were really looking for an investor group who had helped built-world, physical companies move from early startup proof points to scale," said Jason Ballard, co-founder and CEO of Icon, pointing to Baillie Gifford's experience with the likes of Nvidia, Tesla and SpaceX, as well as BlackRock's massive real estate portfolio.
"It really is just kind of a world class outcome for us," he added.
Icon is moving ahead at a time when the traditional homebuilding industry is under stress from higher interest rates and higher costs for land, labor and materials. There is also a continuing housing shortage, with some estimating up to four million new homes are still needed to meet current demand.
The funding will be used to scale the Titan, as well as advance new technologies. It will also help the company to broaden its current footprint in Texas, Florida and Washington, D.C., as well as bring it to new markets across the U.S.
"The construction system that Icon has developed over the last decade is compelling, not just because it brings new technologies to bear, but because it works with, rather than against, the business realities that shape a project's success too," said Luke Ward, private companies investment manager at Baillie Gifford. "As long-term investors, we look for exactly this kind of big opportunity for our clients, paired with patient, compounding execution."
Icon previously used its printers on its own projects, like this fully 3D community outside Austin that was a project for Lennar. Now it is selling its new technology to other builders, with the help of special financing from Wells Fargo. The lender is also offering incentives to buyers of the homes.
"This is a new motion for us, right? Putting these things into other people's hands, and we have like 10X the demand in terms of actual money down reservations that we actually forecasted needing for next year," said Ballard, adding that the demand has come from both large publicly traded builders as well as smaller private firms.
Just eight years old, Icon has already scaled quickly. The company's goals are to build homes faster, more affordably and more sustainably.
"We hit all these quality, measurable performance metrics. That's got people excited," said Ballard. "This is an industry that's under a lot of distress right now and is looking for new solutions because the old ways simply aren't working."
Icon is on pace to see four times revenue growth this year, according to Ballard, who predicts they will at least double that next year, based on their current pipeline. He also said he sees a potential IPO in the future.
Icon has also been working with both the U.S. military and NASA. It is currently deploying robotic construction systems to, "rebuild military readiness, strengthen national security infrastructure, and extend human presence beyond earth," according to the company. For the latter, it was awarded more than $370 million in government contracts to advance Project Olympus, which is developing construction systems to eventually build on the moon.
"I think there's going to be some pretty exciting announcements in the back half of this year from NASA about the moon base, and we'll stay in lockstep with them, but that program is feeling really exciting, and we're pretty optimistic about it," said Ballard.
