iMod Structures bet $11M Goldman money on classrooms delivered 98 percent finished

Prefab modular buildings — currently classrooms for California public schools and state universities.

Modular classrooms delivered 98 percent complete can undercut portables on lifetime cost and win California's public education market.

$11M Series A, a mix of equity and warrants — the company's first institutional investment — led by Goldman Sachs Urban Investment Group with Forty Six North Advisors participating.

Founded in 2009, iMod initially focused on disaster relief and workforce housing abroad, with first modular projects in Guam, Haiti and Chile in a partnership with shipping giant Maersk. In 2016 it pivoted to the domestic market and produced a prototype of its first modular classroom.

The $11M round brought Sherry Wang, managing director at Goldman's Urban Investment Group, and Laurence Pelosi of Forty Six North Advisors onto the board. Goldman's Margaret Anadu cited classrooms priced at $250-300 per square foot — inside what's out there today — each about 960 square feet for 26-32 students, with a 24-ton steel frame, quiet even HVAC, reflective glass and central locking. iMod planned commercial-scale production later in 2019, growth from 20 employees to 50-75 in the factory and 20-30 in the office at full production, and a push into California's university systems.

Demand is measured: a 2018 PACE report put California's school facility needs at $3.1-4.1B a year for maintenance alone, and about $117B over a decade.

Delivering 98 percent finished removes the part of construction that schools hate — months of site work — so a building can be installed over a weekend without disrupting operations.

The price point was pitched as an arbitrage for the public sector: higher-quality environments at a cost that saves California money, per Goldman's Anadu.

Seven years of modular practice abroad — disaster relief and workforce housing in Guam, Haiti and Chile with Maersk — preceded the 2016 pivot to domestic education.

Selling to public schools is won on logistics and lifetime cost: a building that arrives 98 percent done turns a construction project into a weekend install.

As of the April 8, 2019 report, iMod expected to commence commercial-scale production of its modular classrooms later that year, had its first five classrooms in production, and was negotiating the first phase of contract awards expected to be announced within weeks. It was initially focused on California — 'a long time before there is a need to look outside of it,' Diserens said — with plans to pursue the state's university systems next.