ICON raises $200M Series D from Baillie Gifford and BlackRock to scale 3D-printed homes at half the wall-system cost

Speaker 2: You're going to run This is important stuff. Right

Speaker 3: now. This is important stuff.

Speaker 2: It's time for our next guest.

Speaker 3: Our next guest.

Speaker 2: From icon. Jason Ballard. Welcome to

Speaker 3: the show. How are doing, Jason?

Speaker 2: We're getting carried away.

Speaker 9: Really good. Nice to meet you, Jordy. Nice to meet you, John.

Speaker 3: Nice to meet you.

Speaker 2: Great to meet you.

Speaker 3: Thank you so much for coming on the show.

Speaker 2: How many how many beers would you drink on Cheeky Pint?

Speaker 9: You know, I think the beers per hour is a good metric. I I I appreciate that it's not a gap metric. I think I'm good for four or five.

Speaker 3: Four or five? Yeah. Time period are we talking about?

Speaker 2: Four five minutes. Four five beers in four five minutes.

Speaker 9: I respect that I gotta be interesting enough to be on for a couple hours, but I think I get on there for a couple hours. I could do four five.

Speaker 3: Okay. Yeah. Yeah. Yeah. That that seems reasonable.

Speaker 9: Brett, record the record is three right now.

Speaker 3: The record is three, but...

Speaker 12: You know how you could speed it up?

Speaker 9: In I would be going in to win.

Speaker 3: Yeah. You'd be going in to win.

Speaker 2: Yeah. But you know how you speed it up is get one of those those hats that have the beer and the Yeah. And you know.

Speaker 3: Oh, yeah. Yeah. Yeah. You guys...

Speaker 2: So you don't even worry

Speaker 3: about your hands.

Speaker 2: You focus can and...

Speaker 3: How everyone was sort of dancing around the Cheeky Pint thing. Are people gonna be... And now season two came and it's clearly a competition. Like every person that goes on Cheeky Pint now is looking at that chart and thinking like, I got to be number one. And so I think anyone who takes the... Anyone who accepts the invite is going to be thinking I gotta at least be number one for

Speaker 2: a little...

Speaker 3: I gotta be at the frontier.

Speaker 9: I wonder I wonder if people are gonna start doping like taking charcoal pills and stuff to like really... 100%. Mean, there's already been

Speaker 2: doping allegations. Or just or just have a huge...

Speaker 3: There's already been doping allegations in terms of size of the glasses and whether or not they're alcoholic Guinnesses or they're zero zeros because sometimes there's founders who come on the show who don't drink alcohol at all and they still want to participate so they drink non alcoholic Guinness and then sometimes they're filmed during

Speaker 9: That the doesn't count. That clearly doesn't count.

Speaker 3: Yeah. So maybe you get disqualified for that, but you still get to do the show. But for the founders that do drink alcohol, it see... It stands to reason that there's going to be a competition. They're to want to get to the frontier. You agree with me, Jordy. You do.

Speaker 2: I wanna talk about icon I think I think it's time. Okay. I think it's time. This guy this guy this guy is ready to ready to... I think you... Let's face it. You wanna go on Cheeky Pie. You wanna you wanna...

Speaker 3: I've technically been on Cheeky Pie. We did a crossover episode. I drank a Guinness with

Speaker 2: them. Right.

Speaker 3: Right. That was technically a Shakey Pie episode.

Speaker 2: Right. Anyways, Jason, it's it's... Thanks for hearing us out here and riffing with us. Yeah. It's

Speaker 9: great to good debate.

Speaker 2: A great debate. But but we have a big gong. We want to hit it. Oh, yeah. Yes. What what's the news?... Some news.

Speaker 9: Yeah. We just closed our series d led by Bailey Gifford and BlackRock. $200,000,000. Boom.

Speaker 1: Boom. You

Speaker 2: Fighting for him today, John. Yeah.

Speaker 9: So... Well done. I appreciate... I feel honored. Thank you.

Speaker 2: Yeah. It shook the room. What... Why'd they give you so much money?

Speaker 9: So I found the construction... Question. My my family back in East Texas wants to know the same... Yeah. Icon is a construction technology company. We giant robots, the the big three d printers to to build things faster at lower cost and at higher quality. And as as you guys know, there's a thing going on called the global housing crisis. We are like not building correctly and shelters are really basic human need and we we feel like we've got lightning in a bottle. We feel like we've got the receipts to prove it and ready to scale this thing up.

Speaker 2: Yeah. So what... Like, how have you been proving out the thesis? Like, are you... What's the core... Well, what's the core metric that you Okay. That you track

Speaker 9: to... So there's there's a lot there sort of inside baseball. The the whole industry itself and construction revolves around this metric of dollars per square foot. Foot. Homes are underwritten that way. Construction's measured that way. Homes are appraised that way. So you kind of have to... Even though we have our own internal metrics on, robotic performance, materials, cost, and thing, that... That's really where it resolves. The automation in particular with three d printing, you know, we're replacing the wall system of a home. We started with wall systems because wall systems historically are the slowest, most labor intensive, materials intensive, and expensive part of the home. Also, walls create like the form and feeling of a home, so it's just like a very powerful thing to automate. The average cost of delivering a wall system in America right now is approaching $40 a square foot. Our new Titan system that we'll be scaling up now delivers wall systems at about $20 a square foot. So about half the cost of construction for the most expensive part of construction.

Speaker 3: Interesting. Heard so many I've heard so many like like hot takes about three d printing not being necessary because you can just, you know, mill. Like like we have a lot of machinery that's good at making flat things. Like Yeah. How do you get over that? Like why isn't it better to just make a flat wall structure in a factory, for example? Or there's a lot of folks who are building houses manufactured in house in like shipping containers, for example.

Speaker 9: Yeah. So I've I've been in construction for almost twenty years inclusive Yeah. Of my time at Icon. Mean shipping container houses, prefab houses, modular houses, everything have been around for quite some time. If that wasn't going work, it would work. And like like, come on. Come out to the field and compete.

Speaker 3: Yeah.

Speaker 9: I I don't think it works for a number of reasons. Number one, a lot of the gains you get by automating, you surrender those gains by shipping. I mean, it's expensive

Speaker 2: to ship

Speaker 9: a washing machine. It's very expensive to ship a house.

Speaker 3: Yep.

Speaker 9: Number two,

Speaker 2: sidetracked. So over the weekend, John and I were driving. We were in the car together, and we see some guy with a big truck driving a house down the road, and then he just pulls off the road and just drives through Like a field. Like it was like an... Cuts the corner. Cuts the corner in a big rig with a house. I've never... I was like that that's the most... Seems like the most illegal thing I've seen on the road

Speaker 13: That's crazy.

Speaker 2: In my whole life. It was crazy. It was like he was bouncing through the field.

Speaker 3: But little did he know he was just trying to help the the bottom line. He was just trying to help the margins.

Speaker 2: Just get there a little faster.

Speaker 3: He's gonna burn more

Speaker 9: fuel if he goes around the corner. Every bit counts.

Speaker 2: That's... Well, yeah. Yeah. Because basically there was a just a normal... He could have just turned right on a real road Yeah. But instead he like cut the corner across this huge field. Yeah.

Speaker 9: Any any thoughts? You know, my thought my thoughts are... I bet that's not the way to deliver a dignified housing to Americans. I I appreciate I appreciate his chutzpah. Yeah. But that sort of maybe makes my second point for me which is to make houses in a factory and ship them, you actually end up having to design the house for the roadway, for the vehicle. And houses aren't for roads. Houses are for people. And so I think that's another limitation of that model. And then finally, you have to standardize a lot in that model. And I think there's like cultural resistance. You need like a million people to want the exact same house or something... Some near variant. Yeah. And I think those three reasons, the economics, the the design problem, and the standardization problem are why those models haven't worked. Three d printing, can think of it. It actually is a factory that comes to the site. Yeah. But because the building material is fluid when you're depositing it, it's like a bespoke housing factory that arrives on-site. It's a lot easier to ship a machine than a house. Sure. And then once it

Speaker 5: gets there, can do a lot

Speaker 9: of a lot of very good work. And so

Speaker 3: How vertically integrated are you? Like, can you just buy a plot of land, build a house, and then sell it on, like, Zillow or Redfin? Yes. Or are there more steps

Speaker 9: So we're not vertically integrated into, the land development itself. So we make our own... We make and manufacture our own robots in our factory

Speaker 7: in Austin.

Speaker 9: We we develop and manufacture our own materials, print material that we call Formpreit. Yep. We make our own software stack. We've developed our own architecture. Okay. And even like the wall system itself has had to be optimized. Maybe if you remember the early desktop printers kind of fought over how to do the internal geometry Yeah. Yeah. For the most efficient printing or whatever. So we've done a lot of that work too. So the sort of full technology stack, we are vertically integrated too because it's it's not enough just to hand people a robot and say good work. It really is a new way of building and you have to deliver that way of building fully formed to the market.

Speaker 3: So who are your customers? Is it like commercial real estate developers that already have like a couple acres of land, they want to build 25 homes and they come to you to actually go and build them but then they will be selling the individual houses?

Speaker 9: You got it. That's exactly how it works so far. We've we've kind of run like a build business using our own technologies to prove that a construction company using these technologies can be very profitable, very powerful, very fast, exciting. The newest business model we launched, which is part of this fundraising, is this technology business model where the technology now is performance enough, stable enough, reliable enough, and the costs are in the right spot that we really want to equip builders and developers all over the world with these tools themselves. Right? The builder of our past showed up on a job site with nail guns and saws. The builder of the future is going show up with robots, advanced materials, and a tablet to operate the whole thing.

Speaker 2: What about builders on the moon?

Speaker 9: You know? Yeah. Yeah. We do hold the contract with NASA to develop the lunar construction system. It's very similar thesis. Right? If we're gonna build on the moon, number one is gonna be robots. It's too difficult to spot for humans to build. Number two, you need to use the local resources of the moon to build on the moon because it's too expensive to get things to the surface. Every other plan NASA had involved bringing everything with you. It's the shipping problem again. The number three, versatility beats specialization. You need a single system that can do landing pads, roadways, walls

Speaker 2: Sure.

Speaker 9: Reactor shielding, habitats, everything. And so we've been developing that system. We have hit all of our performance gates, kind of blew all our performance gates out of the water. And now the new NASA administrator is talking about moon base, moon base, moon base. And I think we'll have some very exciting news to announce on that front soon.

Speaker 3: That's very cool.

Speaker 2: I like the sound

Speaker 3: Congratulations of on the fundraise. Thanks for coming on.

Speaker 9: Thank you very much. Yeah. Thanks for having me.

Speaker 3: It was a great time.

Speaker 2: Great to hang, Jason.

Speaker 3: We'll talk to Looking forward

Speaker 2: to make make sure make sure we get you on the show Yeah. That next announcement.

Speaker 9: Yeah. That'd be great. Yeah. Thanks, friends.