TDR Capital-backed modular housing firm, ilke Homes, has raised £60 million in a recent fundraising round, putting the company on course to become a top ten housebuilder within the next five years by delivering 10,000 factory-built homes.
The £60 million raise is split between £30 million debt from government agency Homes England and £30 million of equity from multiple new investors.
The Guinness Partnership, one of the UK’s largest providers of affordable housing and a customer of ilke Homes, is one of the new equity investors. The housing association has signed two deals with ilke Homes in the last year, for sites that will deliver 250 factory-built homes.
Tech-focused family office Middleton Enterprises and private equity firm Sun Capital have also taken equity stakes. TDR Capital has also injected further equity.
The £30 million of debt comes via a facility from Homes England’s Home Building Fund. The Government’s housing agency invested an initial £30 million into ilke Homes back in 2019, which marked the first time the agency had ever directly invested to boost an offsite manufacturer’s production capacity.
The announcement comes at a time when the Government is championing offsite manufacturing – where homes are manufactured along production lines in a factory – as a solution to ramping up the delivery of high-quality, energy-efficient housing across the UK to tackle climate change and acute housing shortages.
Harry Swales, chief investment officer at Homes England, said: “Manufacturers like ilke Homes are vital if developers are to build new sustainable homes at the pace and scale the country needs. This debt facility from the Home Building Fund shows our commitment in increasing productivity and efficiency in construction to meet government’s housing delivery ambitions.”
Stephen Stone, a board member of ilke Homes who floated FTSE 250 housebuilder Crest Nicholson in 2013 while CEO, said: “This announcement proves that there is a shared ambition among the public and private sectors to find innovative solutions to structural issues that have dogged the construction and housebuilding industries for decades.
“This new funding will help us create hundreds more highly-skilled, green jobs for an economy that is gearing up for a Green Industrial Revolution.
“The fact that our own clients continue to either invest or increase their stakes in the company is testament to the dynamic approach ilke Homes has taken to house building in the last three years. Faced with regulatory pressures and a requirement to meet ESG criteria, we are finding that investors are increasingly scaling up their MMC strategies.”
The new funding will be transformational for ilke Homes, allowing the company to invest heavily in automating more of its manufacturing processes to drive efficiencies, secure more sites and expand its ‘package deal’ strategy, which offers full development service of site, infrastructure and homes in a rapidly growing market.
The monies will also be used to scale-up production and accelerate capacity to deliver up to eight homes a day, up from two today – all helping to bring down manufacturing costs in the process.
ilke Homes’ most recent fundraising round follows a year of rapid growth, which has seen the company grow its order book to over £200 million and sign a sector-defining deal with FTSE 100 firm Boots UK to deliver over 600 homes in Nottingham.