Property technology startup Veev, once a pioneer in modular construction technology, is now on the verge of closure, leaving many questioning the circumstances that led to its downfall. Having raised a substantial sum of about $600 million, the company’s impending closure was reportedly communicated to its over 400 employees, with attributions to the sudden cancellation of a capital-raising initiative.
Veev, with a peak workforce of over 400 employees, including 100 in Israel, informed its staff about the impending closure on Sunday, citing the abrupt cancellation of a capital-raising initiative as the primary cause. The company revealed that it was in the process of raising capital when the initiative was canceled at the last minute. The challenging market situation in Israel and globally made it impossible to secure additional funding, ultimately leading to the decision to close the current entity of the company.
The closure is expected to occur in the coming days, with a planned transfer to an assignee who will be responsible for managing the assets and their subsequent sale in the U.S. Meanwhile, the company’s operations will continue until a buyer is found for the assets, allowing employees in Israel to continue working during this transitional phase.
Negotiations are reportedly underway with a leading company for the potential acquisition of Veev’s activity and assets. However, if these negotiations fail to yield positive results, all of the company’s employees may face termination, and the company will cease its operations.
As part of its U.S. operations, Veev had previously acquired properties in California, financed through debt from various lenders and bankers. The challenging economic environment and declining real estate prices, particularly in California, prompted Veev to inform lenders that it would be unable to continue interest payments. The company has temporarily halted payments until the properties are sold, citing difficulties in striking deals due to the challenging real estate market conditions.
Veev, known for its proprietary panelized approach to produce fully cladded walls with integrated mechanical, electrical, and plumbing (MEP) solutions, had previously raised $400 million in a Series D funding round. This achievement elevated the company to unicorn status in March 2022, emphasizing its focus on expanding operations in the U.S.
The Series D funding round was led by BOND, with participation from LenX, Zeev Ventures, Fifth Wall Climate Tech, and JLL Spark Global Ventures. Veev’s intention was to utilize the funding primarily for the expansion of its operations in the U.S. However, the recent turn of events, including the cancellation of a capital-raising initiative, has cast a shadow over the company’s future.
In March 2021, Veev had raised $100 million through the Tel Aviv Stock Exchange’s TASE UP platform. Noteworthy investors, including Migdal Insurance, Psagot Investment House, More Investment House, and Shavit Capital, had participated in this funding round. These investors did not take part in the latest funding round, indicating a shift in confidence.
Founded in 2008 by Amit Heller, Ami Avrahami, and Dafna Akiva, Veev had employed around 140 people before the recent workforce reduction in November 2022, where 100 employees were laid off. The circumstances leading to Veev’s closure raise questions about the challenges faced by property technology startups in a dynamic and evolving market.
The property technology sector, often referred to as proptech, has witnessed significant growth and innovation in recent years. However, the case of Veev serves as a stark reminder that even well-funded and pioneering companies can face unforeseen challenges that impact their viability and sustainability.
As the negotiations for the potential acquisition unfold, the fate of Veev hangs in the balance. The story of Veev’s rise and fall sheds light on the complexities and uncertainties within the proptech industry, leaving observers and stakeholders to reflect on the broader implications for the sector.