Assembly OSM, a modular construction startup that likened its process to assembling Ikea furniture, raised $38 million in Series A funding.

The company was founded in 2019 by twin brothers Bill and Chris Sharples, principals of Manhattan-based SHoP Architects. Assembly calls its method of construction “post-modular” because it is more akin to a car or airplane assembly line than traditional modular construction, where the structure is assembled on a single factory floor. .

Instead, assembly stretches construction across a wide network of suppliers and manufacturers – an approach that “constrains” the process but allows more design freedom, CEO Andrew Staniforth said.

The startup has now raised over $60 million. Fifth Wall’s Climate Tech Fund and Bessemer Venture Partners’ Rob Stavis led the latest round, with participation from Jefferies Group, Manta Ray Ventures, FJ Labs, CSR, Signia, Gaingels, New Vista Capital, Tectonic, Atento, Etan Fraser and Moving Capital.

The Fifth Wall fund is “dedicated to decarbonizing the built environment and the global real estate industry.” Assembly claims that its buildings can contain 30-40% less embodied carbon than traditional buildings and that its construction sites reduce emissions by 60-70%.

The appeal of modular construction shifts much of the construction process to a controlled indoor environment with constant labor. But as a relatively young industry, it’s far from perfect.

Many companies are trying to solve the problems of modular construction. Assembly, which does feasibility work in New York, San Francisco, Los Angeles, St. Louis and other cities, is no stranger to setbacks. He had planned four Manhattan buildings with 800 apartments, but Staniforth said these were feasibility studies for projects the Assembly ultimately did not pursue due to the pandemic and other factors.

Staniforth worked at Forest City Ratner Companies when the company was building its B2 project, a 32-story modular tower, only to see it bogged down by litigation, cost overruns and leaks. He said Assembly employees can assure developers and investors that they “know what went wrong on this project.”

“It’s a big, important statement that we can make because we lived through this project,” he said.

The high-profile failure of another modular startup, Katerra, which filed for bankruptcy last year, did not deter Assembly. Staniforth said one of the easiest ways to combat the “Katerra stigma” is to signal to developers and investors that Assembly’s approach is “the exact opposite.”

Katerra had a vertically integrated business model, aiming to control all aspects of the construction process by acquiring architecture, engineering and construction management companies and opening its own factories.

The approach required massive injections of capital, was plagued by delays and proved unsustainable.

“In our world, we have redundancy,” Staniforth. “We have several suppliers for each of the components.”