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Major house builder leads £70m investment in Goldman Sachs-backed modular firm
Large house builder Persimmon and institutional investor Aviva have invested in TopHat, a company that builds factory-made modular houses.
In a release, TopHat announced it has raised £70m from its latest fundraising round, with US-based firm Goldman Sachs buying in once again.
TopHat is currently not profitable, but its losses have reduced in recent years and the firm has given itself two-and-a-half years to change that as it scales up production.
It currently manufactures up to 800 homes a year from its 125,000 sqft facility in Derby.
Work is scheduled to complete later this year on a 650,000 sqft factory in Corby, Northamptonshire, with the site to reach full production in mid-2024.
This will be the UK’s largest modular factory, surpassing rival Legal & General (L&G) Modular Homes’ 550,000 sqft warehouse near Leeds.
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TopHat’s new factory will construct up to 4,000 homes a year.
The organisation said Homes England, which has funded existing developments, is continuing to explore the potential for additional support.
Unlike its modular housing competitors L&G and Ilke Homes, TopHat only sells houses to third parties. About a third of its output is bought by housing associations, another third by developers such as Ikea’s BoKlok, and the final third by build-to-rent providers.
TopHat has claimed that all of its homes are capable of being zero carbon, through the incorporation of heat pumps, insulation and solar panels.
Jordan Rosenhaus, chief executive and founder of TopHat, said the £70m fundraising “marks a step-change for the future of housing”.
He added that the funding will enable the firm to “reach the scale where the new generation of modular homes can be made available to everyone”.
Dean Finch, group chief executive of Persimmon, said: “This investment provides Persimmon with guaranteed access to very energy-efficient volumetric modular units, as well as TopHat’s innovative brick façade to use with our Space4 timber-frame products. This will provide further build efficiencies, manage the growing challenge of labour shortages in key trades and expand our product range for customers.”
John Cummins, chief executive of Aviva Capital Partners, said: “TopHat is a pioneer of low-carbon homes, and this investment will make sustainable housing more widely available, making a difference to communities and providing a retirement income for our customers.”
Harry Swales, chief investment officer at Homes England, said: “We’re committed to increasing the use of MMC [modern methods of construction] and supporting our partners in the sector to invest in it. This investment from TopHat, Persimmon and Aviva Capital is not only an important step forward for TopHat, but really encouraging for the wider sector.”
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