Amazon’s Move into Prefab Building Sector

Efficiency has always been a major bottom-line concern for construction companies, and with the continuing labor shortage and steadily rising material costs and other market challenges, prefabrication has become increasingly popular, particularly in housing-strapped urban markets. With a company the size and stature of Amazon entering the fray, it’s a good sign prefab construction will only increase in popularity from here.

Amazon’s Alexa Fund was among the backers of a $6.7 million Series A round recently raised by Plant Prefab, a Rialto, California-based prefabricated homemaker that was spun out of the award-winning design and development firm LivingHomes in 2016, perhaps best known for building the first LEED Platinum home in the U.S.

Plant Prefab emphasizes sustainability in its construction, materials and operations. From its 62,000 square-foot all-weather facility, the company says its patented Plant Building System can produce low-cost single- and multifamily homes in half the time and with considerably less waste than traditional, site-based construction methods.

"Plant Prefab is unique in that we’re focused on custom, high quality, very sustainable homes."

Part of what sets Plant Prefab apart from many other prefabricating shops is its commitment to quality. The company doesn’t race to the bottom on materials or functionality in deference to speed, instead focusing on delivering a well-made, sustainable finished product.

“Most existing prefabrication companies in the U.S. focus on standard, low quality, non-sustainable mobile and modular homes — for suburban communities. Plant Prefab is unique in that we’re focused on custom, high quality, very sustainable homes and we have a special facility and a patented building system optimized for this,” Plant Prefab founder and CEO Steve Glenn said in a company statement.

On top of labor and materials worries, building homes in today’s densely packed urban areas present many practical challenges builders must contend with, like zoning regulations and irregular lot shapes. To help clients overcome these obstacles, Plant Prefab offers an array of customization options to ensure project compliance no matter how restrictive the conditions.

“We build based on client’s architects or clients can select from a growing number of homes we offer from world-class architects, all of which can be customized for specific lots and client needs,” says Glenn.

The firm’s tailor-made approach flies somewhat in the face of the traditional understanding of prefabrication, which usually involves standardization and sameness. Plant Prefab, on the other hand, has partnered with top architects and designers including Ray Kappe, Kieran Timberlake and Yves Behar.

With the U.S. urban population exploding, demand for housing often far outstrips the supply, and the glacial pace at which new homes are completed using traditional methods does little to even things out. The company says its innovative approach to prefabrication slashes construction time by 50% and cuts costs by as much as 25% in major cities, which could have a substantial impact on the urban housing shortage.

The company says its innovative approach to prefabrication slashes construction time by 50% and cuts costs by as much as 25% in major cities.

“In the housing-crunched major cities like Los Angeles, New York and San Francisco, along with areas like Silicon Valley, it takes too much time to build a home from groundbreaking to occupancy, and labor shortages, construction delays and increased construction costs are exacerbating this trend even further — and making homes increasingly less affordable,” Glenn said in a statement.

“Building homes in factories addresses these challenges, particularly as we’re able to integrate online technology, new building systems, and automation to dramatically reduce the time and cost necessary to design and build high-quality, custom homes.”

Since the 2014 introduction of Alexa, its now-ubiquitous voice-activated home assistant, Amazon’s interest in smart home technology has only accelerated. It acquired smart doorbell camera startup Ring for a cool $1 billion earlier this year, and Alexa can now be found in more than 20,000 smart home devices, from light switches to robot vacuums to smart fridges.

Amazon’s investment in Plant Prefab gives the company a toehold in home construction, which could help the company extend its reach in the connected home even further, generating untold revenue streams down the line as the technology becomes more prevalent in the houses of the future.