A Vancouver-based company that constructs energy-efficient buildings using a unique cement-like material has closed an equity financing that it says vaults it past unicorn status in less than three years.
Nexii Building Solutions Inc.’s $45-million funding round was led by industrial manufacturers Honeywell International Inc., Trane Technologies PLC and other investors. The privately held company says it now has a valuation of US$1.23-billion, 31 months after it was established with technology developed by two brothers in Moose Jaw.
Private companies with valuations that hit US$1-billion are referred to as unicorns, and Canada’s technology and manufacturing sectors have produced a number of them over the past few years.
Nexii, which counts former Vancouver mayor Gregor Robertson as a senior executive, manufactures structural panels made from a proprietary material it calls Nexiite, which is flat-packed and trucked to building sites. Nexii’s panels are bolted together for construction of walls, eliminating the need for wood or steel framing. The panels also do the work of insulation, drywall, vapour barrier and exterior siding.
The technology promises to reduce building times by up to 75 per cent, cut energy demand for heating by 55 per cent, and produce up to a third less carbon during manufacture and construction than is used for conventional buildings.
The company has completed projects for such customers as Starbucks, Bank of Nova Scotia and Popeyes Louisiana Kitchen, and is working on a new outer envelope for a Marriott Courtyard hotel in Nanaimo, B.C.
In April, Nexii announced it had struck a deal to build a manufacturing facility in Pittsburgh. It will be the company’s sixth plant and its second in the United States.
The company had its beginnings with Michael and Ben Dombowsky, who developed Nexiite. Stephen Sidwell, Nexii’s chief executive officer, said a friend told him about the Dombowskys and their invention. The first building using the material was constructed in Moose Jaw a decade earlier, and since then another five have been completed in the city. Mr. Sidwell had previously founded companies in manufacturing, retail, real estate and food service.
Mr. Sidwell said it took nine months to be persuaded to take a closer look at the technology. “I went and I met the two brothers in Moose Jaw and one day later said, ‘Okay, I’m in. I’ll be the CEO, I’ll provide the initial seed capital,’” Mr. Sidwell said.
They formed the company in early 2019, and built the first manufacturing plant six months later. This spring, Nexii commissioned an 85,000-square-foot plant in Squamish, B.C.
The technology is aimed at helping to reduce carbon emissions from two large sources. Thirty-nine per cent of emissions come from buildings, and demand for new and retrofitted housing and other structures is surging with increased urbanization. Meanwhile, a main construction material – concrete – accounts for 8 per cent of greenhouse gas emissions.
The company has attracted well-known business leaders to its board, including current and former executives and directors from Vanguard Group, Uber Technologies Inc., Apple Inc., engineering firm AECOM, Bank of America and consultants Korn Ferry. This week, it named David Taylor, chief executive and executive chairman of Procter & Gamble Co., as a director.
Nexii has sketched out a licensing model for its technology, and has formed partnerships with Honeywell and Trane.
In total, the company has raised $125-million, and despite its home base and a growing imperative among institutions to boost sustainable investments, its major funders are from the United States, including a large pension fund. This could be because of a Canadian preference for less-risky later-stage investments, Mr. Sidwell said.
“We have been so determined that we are going to have this be a Canadian story, and we just have not been able to keep it that,” he said. “We’re still going to be based in Canada. I don’t think that we’ll change that.”
Jeffrey Jones writes about sustainable finance and the ESG sector for The Globe and Mail. Email him at firstname.lastname@example.org.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.