Katerra

Katerra aimed to revolutionize construction by vertically integrating design, materials, and building—essentially becoming the Apple of construction. SoftBank poured $2B into the vision. But construction is a fundamentally local, relationship-driven industry with thin margins and complex regulations. Katerra tried to do everything at once: build factories, develop software, manufacture materials, and manage construction projects. Quality issues, project delays, and massive overhead consumed cash faster than revenue could grow. The company filed for bankruptcy in 2021 with over $1.5B in losses. The lesson: vertical integration works in tech but can be catastrophic in physical industries with high complexity and low margins.