Inside the chaotic Thanksgiving-weekend collapse of homebuilder startup Veev that left employees shocked and worried about their jobs

• Employees at Veev were taken aback when they received an email late Friday night announcing the company’s demise.
• Veev is now operating with a skeleton crew and looking for a buyer after failing to secure funding.
• See what CEO Amit Heller said to employees via email and at a Monday all-hands meeting.

Most Americans spend the days following Thanksgiving sleeping off the turkey, shopping for bargains, or spending time with family. Workers at Lennar-backed homebuilder Veev, on the other hand, spent their time worrying about whether they would still have jobs on Monday.

On Friday, November 24, the CEO of the California and Tel Aviv-based startup announced via email that the startup’s efforts to secure funding had failed and that the majority of its employees would be laid off on Monday. A WARN notice was attached, stating that the former unicorn planned to close its Hayward, California, headquarters and that more layoffs would occur in December.

Amit Haller’s email, addressed “Dear Veev Family,” stated that he and his co-founders did “everything in our power” to keep the company afloat. In his letter to the “Veev Family,” he released the following statement: “Family will stay in touch and together forever, even if it is going to be only within our hearts.” (A copy of the entire email is included below.)

---

According to one laid-off employee, the email caught them off guard — so much so that some employees wondered if it was a hoax. According to job postings, the unicorn-status startup had been actively recruiting talent. And, according to this person, leadership had been optimistic about the company’s prospects prior to the layoffs.

“I got the email at 7:11 p.m. “By 7:12 p.m., I had received three texts from other coworkers, and by 8:00 p.m., I was in all kinds of group chats with questions flying about what was going on and whether what had happened was real,” the fired employee told Insider.

Reality set in by Monday morning. CEO Haller explained in an all-hands meeting that the company was unable to close a pending funding round and, as a result, had to lay off almost all employees and place the company’s interests in a trust. According to the news site Calcalist, the company employs approximately 250 people. According to a recording of the meeting reviewed by Business Insider, a small skeleton crew of employees would finish up outstanding projects in the hope that the company could attract a buyer.

According to Haller, the company was finished unless a white knight buyer came along.

“We call it the Veev family,” Haller explained. “‘No, family doesn’t let their people go,’ some of you may say. But we’re doing everything we can to keep it running, and sometimes there’s only so much you can do.”

According to Haller, the company is in dire financial straits but has not yet run out of money. Instead, it intends to use its cash reserves to “transition” the company with a small team in order to attract a buyer. According to an email obtained by Insider, the company will retain approximately 50 employees in the United States to work on outstanding projects. According to the laid-off employee, the company has stated that Israeli operations will continue, despite the fact that the ongoing war has had an impact on operations.

A spokesperson declined to comment on specifics, but issued a statement to Business Insider blaming “the macroeconomic environment.””Veev was in the process of a funding round these last few weeks,” according to the statement. “Unfortunately, due to the macroeconomic environment, the round did not come to fruition at the anticipated closing date this week.” The company will go through an assignment for the benefit of creditors process, hoping that what was created will live on in some form or fashion.”

Funders back out

Veev, founded in 2008 as the Dragonfly Group as a real estate investment firm, is one of many companies working to create prefab housing that can help make it cheaper and greener to build quality homes. The company made housing panels in a factory in Hayward, California, that already had all of the necessary mechanical, plumbing, and electrical work, with the goal of making building construction much faster on site. According to Crunchbase, the company has announced nearly $600 million in venture funding from funders such as LenX, homebuilder Lennar’s venture arm, Kleiner Perkins-affiliated Bond, proptech leaders Fifth Wall, and commercial real estate giant JLL’s venture fund. It was enough to turn it into a unicorn and land a 102-unit project with Lennar.

After laying off about a third of its workforce in November, the company shifted its business model from building multifamily housing to focusing solely on single-family homes earlier this year. Reali, a real estate finance startup founded in 2016 by Haller and other Veev founders, shut down last year after raising over $290 million in debt and equity.

Calcalist, which broke the news of the company’s demise, reported that the company had only received $200 million of the $400 million it claimed to have raised in its March 2022 Series D Round. The remainder was scheduled to arrive in March of this year, but after the company shifted its focus to single-family homes, major investors, including Lennar, withdrew from the second cash infusion. Instead, the company attempted to raise a $120 million funding round, which failed, and then attempted to secure a bridge loan from investors, which Lennar declined, forcing the company to liquidate.During the all-hands meeting, Haller stated that the majority of the company’s previous investors were “very happy” with the company’s progress and were working on a new deal. Haller stated that investors had signed term sheets when one of them decided to withdraw from the deal.

The CEO stated that the founders had no idea why the investor, whom they did not name, pulled out of the deal, but that they suspected it had something to do with the global economy and the investors’ own internal issues. Veev’s executives worked through Thanksgiving to try to save the deal, but they were unsuccessful, he said. According to documents obtained by Business Insider, the company expected additional funding as recently as November 20.

While it is uncommon for investors to withdraw from a deal after signing term sheets, it does occur. Investors may withdraw due to larger macroeconomic changes, such as the early days of the coronavirus, or because they realize that deals may not be as good as they appear, but they may also simply walk away from deals.

2023 has been an especially difficult year for startups of all types, but particularly those in the real estate and construction industries, as interest rates have significantly slowed both industries. According to the Center for Real Estate and Technology Innovation, proptech funding was only $1.69 billion in the first quarter of this year, compared to $7.44 billion in the first quarter of 2022.

Employees who have been laid off have been waiting for answers as executives worked over the weekend to provide them with a FAQ document about their separation, which one laid-off employee received on Tuesday after executives originally promised it on Saturday.

The terms of employees’ severance are still unknown. Employees can expect to receive their separation package three days after their official termination date of Monday, according to Chief People Officer Linda Keala. Thursday is also the last day that employees will have access to health insurance, though they can purchase COBRA coverage for the month of December, after which the operating company will cease to exist and they will no longer be able to use COBRA. The laid-off employee is unsure how much the company will pay in severance, but is concerned that the company may claim an exemption from the WARN Act, which requires employees of mass layoffs to be given either 60 days’ notice or pay in lieu of notice. The company is claiming the “faltering company exception,” which means it may provide a much smaller severance payment than is typical.

The following is the full text of the initial email:

Have you worked at Veev before or know anything about what’s going on?Contact this reporter via Signal at +1 (646) 768-4772 from a non-work phone, email at anicoll@businessinsider.com, or Twitter DM at @nicollsanddimes. (Please send PR pitches via email only.) You can also securely contact Business Insider using SecureDrop.

Greetings, Veev Family.

As you are aware, the company has been working hard to secure funding for its operations. Unfortunately, these efforts were unsuccessful, and I regret to inform you that, as a result, Veev will lay off all but a few of its employees on Monday, November 27, 2023, to assist with the transition.

We know you have a lot of questions, so we’re putting together a Frequently Asked Questions (FAQ) document to help you find answers. We hope to have the FAQ available to you by tomorrow.

Amit Haller, Veev has been my personal journey for the past 15 years, half of my professional career and roughly one-third of my life. I believe in the mission more than anything else, and I’m sorry for failing you all by not being able to complete it.

We tried everything in our power to make it happen, with me, my two co-founders, Dafna and Ami, and obviously, the entire amazing Veev family, we worked days and nights and weekends, we celebrated together and recently we cried together, we are a true family, the best and the finest we could ever build. Family will always be in touch and together, even if it is only in our hearts.

Amit