Cover, a modular home builder that modeled in ways after Tesla, has raised a $60 million Series B

Many startups are now focusing on modular home design. Cover, a seven-year-old firm located in Los Angeles, claims to create an entirely complete wall, floor, and roof panels in its facility, then transfers them on a regular truck and assembles them on site – all without the use of a crane. The building frame is made of lightweight steel, while the ceilings are made of aluminum. Because “drywall is not meant for manufacture or shipment – it’s extremely fragile,” says founder and CEO Alexis Xavier Rivas, the panels are composed of a rubber composite.

Clearly, a lot of care has gone into the construction of these structures. For example, the business builds all plumbing and electrical wiring in the ceiling, so if a homeowner has to run a new wire or pipe, all they have to do is take the ceiling. It seems unusual, but it is not quite as bizarre as carving a series of holes in a wall, then repairing and repainting them to create the same result. (It also needs fewer artisans, such as plumbers and electricians, who are now in short supply.)

Other materials utilized include genuine wood and wood composites for the flooring, exterior, as well as nonporous solid surface worktops, and bathroom floors, which are becoming increasingly important to homeowners as the globe emerges from a pandemic. Given that Cover’s focus — and promise — is on both rapid assembly and customization, how the materials fit together is inherently significantly more important.

The procedure, according to Rivas, is as follows: A customer collaborates with the firm to produce a design. Currently, that design is limited to single-story units of 1,200 square feet or less that consider considerations like where windows should positioned to reduce energy waste. (Rivas also mentions that the Cover windows are LEED-certified and that the dwellings are airtight, which greatly improves energy efficiency.)

Cover, a modular home builder that modeled in ways after Tesla, has raised a $60 million Series B

Cover then takes the agreed-upon design and gets to work engineering the pieces for a price that includes permitting fees, city fees, foundation fees, and the home itself — think $200,000 for a 400-square-foot studio, $250,000 for a 600-square-foot one-bedroom unit, and up to $500,000 for a 1,200-square-foot three-bedroom dwelling — 

Surprisingly, it claims that after the foundation is complete, the structure can be erected and installed in 30 days, rather than the 120 days it had promised consumers.

It also promises a full refund if it is unable to secure the required permissions, as well as a lifetime structural warranty and a one-year warranty on everything else. According to Rivas, these structures will not decay. “Termites aren’t going to consume them,” says the narrator. “We’ll change them” if a consumer requires new air filters, on the other hand.

Rivas, who grew up in Toronto, studied architecture in college, and worked briefly for a number of architectural firms before founding Cover, is proud of the mission’s ability to attract engineers from SpaceX and Tesla, and likened Cover’s processes to those of the automaker at various points during a conversation earlier this week.

He does not appear to be the only one who finds parallels. Gigafund, an investment group created by two former Founders Fund investors who have invested heavily in SpaceX, said today that it has received $60 million in Series B funding for the company. Valor Equity Partners and Founders Fund, both early investors in SpaceX and Tesla, are among the round’s backers, as are General Catalyst, Lennar, Fifty Years, AngelList co-founder Naval Ravikant, Lowercase Capital founder Chris Sacca, Marathon Asset Management CEO Bruce Richards, and Dropbox co-founder Arash Ferdowsi, among others.

Given the national housing — and construction — crisis, there’s little doubt that what Cover is developing will be in high demand. When questioned about Cover’s sales team, Rivas replies that there is so much inbound demand right now that just “one-third of one person’s time is spent in sales.” When it comes to what individuals are purchasing, Rivas adds that the majority of the company’s clients have purchased homes to accommodate either family members moving in (an older parent, a child returning from college), a home office separate from their home, or a means to generate rental revenue.