Modulous was set up in 2018 but all staff made redundant late last year after running out of funds
Modulous is the latest modular housing firm to go bust having “failed to secure the venture capital fundraising needed to keep it going”.
All 50 staff at the off-site housing firm were made redundant at the end of November with final salary settlements yet to be paid.
The company signalled its intention to enter administration on 29 November and appointed Opus Restructuring. It is expected to formally enter administration later this month.
Launched in 2018, the housing business consisted of a physical kit of parts that could be used to deliver multi-storey, multi-occupancy housing, and a digital design tool called TESSA – an acronym for Tech Enabled Solutions for Sustainable Architecture.
It is the latest modular business to fail, following Ilke Homes, House by Urban Splash and last year’s closure of Legal&General’s modular arm.
Modulous was initially backed by venture capital investors including Regal London and Cemex Ventures, having raised £10m of Series A funding in September 2022. However, the company subsequently reported a loss of £9.5m, with a turnover of £91,000.
Former Modulous client accounts director Chris Spiceley told Building’s sister title Housing Today: “The was unable to close the [venture capital] funding needed to keep the company running.”
Spiceley, who joined the firm in September 2022, and lost his job in late November added: “[Modulous] had substantial outgoings, monthly burn plus ongoing projects and it just wasn’t able to sustain itself any longer.”
Spiceley and a number of other Modulous employees wrote on LinkedIn in December advertising their availability for work.
“We received a note from the chief executive and then a follow up meeting held by the administrator where they outlined what the redundancy process would be,” Spiceley said.
Spiceley said staff haven’t yet received final payments.
“There are some people who have missed out [on payments]. So we’re waiting for the administrators to detail what price has been paid for assets and any monies available, and then what recompense we get out of that process,” he said.
“We’ve been informed, obviously, that staff have the highest ranking, HMRC second, and then whoever follows in the list of creditors. We’re waiting to see what comes out of that process.”
Bristol City Council was the offsite firm’s only client actively using its toolkit on a development of 12 homes on Romney Avenue. The low carbon project was awarded planning permission in 2022 and was due to be completed this year.
A council spokesperson said: “Our project to deliver 12 new council homes on the site at 190-196 Romney Avenue has recently been paused as our delivery partner, modular homes firm Modulous, went into administration in December.
“We now plan to bring forward the development using a different delivery approach based on the planning consent and design work already completed.”
“It’s a massive shame. From a personal point of view, I absolutely think that the model that was proposed by the original founders had massive value in trying to increase productivity, velocity, and consistency in this industry of how we deliver housing,” Spiceley said.
“Ultimately, elements of the execution of that strategy were flawed. It took far too long to get certain things done. We know construction and real estate are never the fastest moving industry and when you combine the returns that private investment need with those sorts of sales cycles and the need to develop technology, both physical and digital, it’s a hard thing to get those things to match in sync. That was the struggle that Modulous failed to really master.”
He added: “We were on the cusp of some very good things. It’s just unfortunate timing really, that we should not be able to get there. Someone’s going to have a good digital tool out of it.”
Modulous chief executive Chris Bone added: “The vagaries of the venture capital markets are what caused [Modulous’s collapse] and not the modular construction market per se.
“What we discovered over the last two or three years is that the venture markets want to move very fast and the UK construction market doesn’t. It’s very difficult to satisfy venture funders with their appetite to get to revenue and grow quickly when the planning processes and all the usual inertia in the UK construction market prevents you from doing that effectively.”
Opus Restructuring did not respond to requests for comment by the time of going to press.