Anyone who’s stepped foot in one of these portables can attest to the fact that they are not always the most comfortable or secure “buildings.”

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Vallejo, California-based , wants to take the concept of portable classrooms to another level by bringing modular, or prefabricated construction, to the public education sector. And it’s just raised an $11 million Series A led by the to help it achieve that goal in California. The financing, consisting of a mix of equity and warrants, marks the first institutional investment in the company.

As part of the financing, , managing director in the Goldman Sachs Urban Investment Group, will join the iMod Structures board of directors. , co-founder and principal at , also participated in the new round of funding as a new investor. He will also join the iMod board.

Founded in 2009, iMod Structureson disaster relief and workforce housing abroad with its first modular projects going up in Guam, Haiti, and Chile as part of a partnership with shipping giant Maersk. In 2016, the company pivoted to the domestic market and produced a prototype of its first modular classroom.

In general, the prefab sector is gaining momentum. Over the past few months alone, I’ve written about N.C.-based Prescient, which specializes in prefab multifamily and student housing construction, raising $50 million and another,  which is focused on prefab single-family homes, raising $14 million.

iMod believes its core differentiator from other modular construction companies is that when it delivers its classrooms, they are 98 percent completed.

“We don’t want to be in the business of site build,” said John Diserens, co-founder and chairman of iMod Structures. “When we deliver buildings, they are finished and ready to be connected to utilities.”

, partner & managing director of the Goldman Sachs Urban Investment Group, told Crunchbase News that her group invests in initiatives that are focused on underserved populations.

“So many young students are sitting in these portables, the majority of which exist well past their intended use time,” she said. “With iMod, we saw a great opportunity to put them in beautiful, comfortable and technologically-advanced classrooms.”

Goldman was also drawn to the fact that iMod is able to outfit its classrooms for $250 to $300 a square foot. (Each classroom is about 960 square feet and hold 26-32 students.)

“iMod’s ability to provide these at a price point inside of what’s out there today was very compelling,” Anadu told Crunchbase News. “So students are provided with much higher quality environments at a cost that’s going to save money for the California public sector.”

In addition, the durability of a steel frame (it weighs 24 tons) should translate into savings with less ongoing maintenance over time, the company believes. The classrooms’ features also include HVAC systems that evenly distributes heat or cool air quietly and reflective glass for windows and doors. Softer lighting and the ability to lock the doors from a central location are also an option.

“We’ll be building highly insulated, safe buildings with energy management programs that can be installed over a weekend without disrupting operations of a school,” Diserens said. “They are sustainable and reusable unlike the current wood-frame bungalows, which have no value after 10 to 15 years.”

The company is initially focused on the California market and expects it will be “a long time before there is a need to look outside of it” due to its sheer size, Diserens told Crunchbase News. A September 2018 conducted by PACE (Policy Analysis for California Education found that, “[a]ccording to a recent estimate, California school districts need to spend between $3.1 billion and $4.1 billion annually just to maintain their existing facilities. Further, the total amount of facility funding needed for California schools during the next decade for modernization and new construction is expected to be about $117 billion.”

iMod is also looking beyond the public school system, with plans to pursue opportunities within the State of California’s university systems.

, government and regulatory partner with , former California State Treasurer, and Los Angeles Unified School District board member, served as an advisor to Goldman Sachs on the financing.

“California educates more students than any other state in the country, and innovative solutions coming from companies like iMod Structures play a key role in addressing the pressure our school facilities often face,” she said in a written statement.

iMod expects to commence commercial-scale production of its modular classrooms later this year. For now, iMod is in the production process for its first five classrooms and is negotiating its first phase of contract awards, which should be announced in the next couple of weeks.

The company is also planning to use its new capital to build out its customer engagement and deployment team. iMod currently has 20 employees between its office and factory but plans to employ between 50 and 75 people in its factory and between 20 and 30 in its office “at full production,” according to Diserens.

Images courtesy of iMod

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In an exclusive interview, CEO and Co-founder shared some details with me about the company’s history, first external capital and what it plans to do with the cash.

Goodjohn launched the company in May 2017, about a year after selling a similar startup in the space, Canada-based , to publicly-traded . Dvele recently relocated its headquarters from Santa Rosa, Calif. to San Diego, where the company acquired a 75,000 square-foot production foundry.

With its fresh capital, Dvele plans to “aggressively” hire – with plans to boost its headcount from 100 today to more than 240 over the next year. So far, Dvele has built about 125 homes. This year it will shift its focus to a higher-end product.

Like all prefab home builders I’ve talked to, Dvele touts its ability to build homes “faster” as an advantage over traditional home builders. Factory time is about six to 10 weeks, while total construction of a home takes about six months, according to Goodjohn. The offsite building process allows the company to sell its homes for the same prices, regardless of the market.

“So there’s no price inflation based on the area,” he told Crunchbase News.

The majority of homes Dvele builds are in the 2,400-3,400 square foot range and will sell (including cost of land) for about $1.3 million to $1.5 million. The company emphasizes its use of software automation, lean manufacturing techniques and the ability to build “extremely” energy efficient homes with the option to be “net positive.”

Dvele saw a modest $6 million in revenue in 2018 with expectations to more than triple to $20 million in 2019. Eventually, the startup aims to develop software tools to “allow people to design their own homes online,” according to Goodjohn.

In the short term, Dvele plans to use some of its funding to build homes in Ventura and Santa Rosa which were both badly damaged by wildfires. The new homes will go on sites where previous homes were destroyed by the fires and become available for sale this summer at a price point Goodjohn estimates will be lower than other homebuilders will offer, and faster than traditional home construction timelines.

Perhaps the highest profile company that has raised venture money in the space, a segment within the expansive construction tech sector, is Menlo Park-based . The startup has raised since its inception in 2015. It is focused on garden style apartments and other multifamily construction. Of course, there are a number of smaller players in the space, such as Dvele.

Goodjohn likens Dvele’s approach to that of Katerra’s but on a smaller, different scale.

“We are Katerra, but for a much larger market of single-family homes,” he said. “I happen to really like a lot of what Katerra is doing and I think we can help each other finally turn the industry as a whole around.”

Coincidentally, I also caught up today with Executive Chairman . Durham, N.C.-based Prescient is focused on prefab construction as well, but is locked in on multifamily, student housing, market rate apartments, senior living, hotels and armed forces and employee housing. Patel first told me back in October how a powerpoint presentation in 2012 led to 75 patents across 30 countries (and 64 more on file), $195 million in equity funding, a pre-money valuation of $650 million, and a 119 percent compounded annual growth (CAGR) since 2012. Over the past seven years, Prescient has completed 36 buildings for a total of 5.6 million square feet of construction with another 4.7 million under development.

Prescient recently began construction on a 1.3 million square foot student housing project at University of California-Davis that marked the company’s first seismic job and what is being touted as the ever built. The company is reportedly in the process of raising a $100 million round of funding, according to the Wall Street Journal.

Ultimately the players in this space are interesting because they are not only drawing VC interest (naturally, that’s our deal) but also because they are attempting to market themselves as innovative and affordable options – two angles we consider noteworthy.