Modular without the factory: Modulous’ plan to turn offsite building on its head

There has been no shortage of ink spilt or money spent on modern methods of construction since Mark Farmer’s famous challenge to the industry in his 2016 report Modernise or Die. According to Make UK, a total of £1bn of private finance has been invested in R&D and new modular factories since the report’s publication, bringing total UK capacity to 5,000 units per year in 2022; meanwhile Homes England’s affordable homes programme has introduced a requirement for developers signing strategic partnership deals to ensure 25% of homes are built using MMC.  

With government and industry alike pinning their hopes on the technology, there is a growing sense that, if net zero targets are to be met and the mounting labour supply crisis is to be swerved, then modular building – in one guise or another – must be made to work. It was cause for concern then, that 2022 saw four modular businesses head down the ”die” route. Major financial trouble at Swan, Caledonian, House by Urban Splash and Countryside’s modular business have led some to question the sustainability of a market which requires high upfront investment in manufacturing facilities and research and development. Maintaining these facilities amid fluctuating demand for units has simply proven too much for some firms. 

>> Find out more about the Building the Future Commission

But if expensive factories are the problem for MMC, what is the solution? 

One modular start-up believes it has the answer: get rid of the factories. Set up in 2018, Modulous is an offsite housing firm with a difference. Unlike many others in the space, the company does not own any factories – or indeed much in the way of physical assets at all. 

Instead, it offers the use of its patented design and feasibility software, which creates customised development options based on Modulous’ kit of parts solution. Once the developer has decided what it wants, the software automatically generates picking lists for all the components needed from the supply chain.

These components are manufactured as sub-assemblies at the national or regional level by supply chain partners – including Knauf, CEMEX, Ideal Standard and Ibstock – before being transported as flat packs to an assembly facility where they will come together as volumetric modular. After that, the completed units will be installed into the foundations, core and podium (they have yet to modularise these elements), built by a traditional construction partner. “A question we get asked is what category of MMC are we and the honest answer to that is we are sort of all of them,” says Chris Hartiss, design director at the firm. 

This approach is all part of Modulous’ philosophy of quiet revolution – transforming the way houses are built but without biting off more than it can chew. “We feel that clients and contractors should be getting a pretty similar experience to what they’ve always had,” says Hartiss. “We don’t want to effect a revolution that starts right at the beginning, because that’s going to be too difficult to do, so this is based on a sort of design and build kind of model at the moment […] A client will appoint a contractor in the usual way, the contractor will appoint design teams [and] subcontractors in the usual way and the supply chain sit behind them.” The client will also have an arrangement with Modulous, which will in some cases be in joint venture with the contractor. 

This year could be pivotal for the firm, with its first units set to hit sites. By Hartiss’ own admission, the company’s physical kit of parts solution, which it has been developing since 2019, is “not that far different from other[s]” on the market – a hot-rolled steel floor casette with four columns into which Knauf-developed wall panels and pre-built wet walls and service zones will be installed and topped with ceiling panels.

But Modulous is a technology company as much as it is a construction firm – its hiring decisions prove as much, with former Google, Microsoft and Netflix staff on the payroll – and arguably it is its software which distinguishes it. “It became apparent that physical solutions and digital ones together, informing one another, were going to be the way forward,” says Hartiss. 

”We get asked […] what category of MMC are we and the honest answer to that is we are sort of all of them”

Chris Hartiss, design director, Modulous

April will see the commercial launch of TESSA – short for Tech Enabled Solutions for Sustainable Architecture – a software platform that generates optimised schemes for Modulous’ kit of parts on any given plot of land in the UK. It runs straight off a web browser, without the need for any special software or application and has been designed so that any property professional, whatever their level of qualification or technical sophistication, could use it.

A user can delineate a range of variables – number of buildings per zone, number of floors, building height, unit type and mix – and the software will spit out a variety of options for the site, comparing one against the other in terms of density, net-to-gross, residential efficiency and other factors. Further layers of information, such as topography and flood zones, can be applied and the firm plans to add more. 

While Building was only shown the minimum marketable product, without the final user interface, it is fair to say this is not a design tool with a capital D. The selection of chunky, Lego-like massing pumped out by the software is only a starting point for developers and designer, promising to enable developers to reap all the theoretical benefits of modular development.

Users are given almost instantaneous ability to assess the viability of a range of different options for their project – simplifying into minutes what would have taken weeks with a traditional approach.

In theory, this could also mean a simplified planning process and may even help foster a more collaborative relationship between developers and planner, with the former able to assess the feasibility of suggested amendments much more easily.

Hartiss, who worked for more than 17 years as an architect at Squire and Partners, envisions (perhaps optimistically) a future in which designers can sit down with local communities and planning officials to work out the boundaries of acceptability for each. It also provides early visibility of cost – the benefit of a largely modular development being a high level of predictability – feeding in a set of benchmark rates for the cost of work outside the kit of parts.

These, says Chris Spiceley, the firm’s client accounts director, “would obviously need to be sense-checked by a QS”, while metrics predicting the cost of Modulous’ own kit of parts element will be updated to reflect what the firm is actually delivering in the market, meaning the tool’s cost predictions should get more accurate over time. 

Hartiss says that as the start-up has matured, its vision for TESSA has become more focused. “At the beginning, the software was going to be a big offering – it was going to try and look at the whole process and try and digitise that,” he says. “I think as we’ve matured, we’ve started to focus on parts of the process and really think about where added value isn’t required now.” 

Indeed, Modulous’ whole business model seems to be centred on what is achievable, focusing its efforts on perfecting the modular technology for a particular building element (the basic living unit) in a targeted, specific segment of the market (affordable multi-family dwellings), while developing procurement processes that will not be too alien to clients.

Spiceley says: “You have to fit with current procurement methods. You can be as innovative and as challenging as you want, but if you’re not conforming with the way people procure, you’re going to find it difficult to get your product, whether its physical or digital, out to the market.” 

Hartiss agrees, adding that the simple steel kit of parts and the focus on affordable multi-family residential will provide a solid foundation on which to build. He says that the software has been built to allow organic expansion for the company’s product range, so that they can eventually introduce new materials such as timber or building typologies outside of their residential base. “All of that can go in there as well and suddenly we are starting to broaden the appeal of the thing from a fairly sort of controlled beginning,” he says. “What we have done [to begin with] is to really focus on the stuff that we think we can deliver really well.”

>> Read More: Growing pains or cause for concern? What recent financial failures mean for the modular market

The firm closed its £10m series A funding round last September, raising money from venture capital funds, including Blackhorn Ventures, GroundBreak Ventures, Goldacre and Leela Capital, as well as UK developer Regal London, the venture capital arm of building material giant CEMEX and SFV, a venture capital fund backed by German real estate firm Patrizia.

Spiceley says Regal’s involvement in particular makes “a huge difference” for the firm and says the real estate business sees Modulous as being “almost like the spine of their operations, because we’ll be involved right from the beginning, using the digital tool to help support their land buying, through the design iterations until the final delivery on site.”

The company is looking into creating a “Regal version” of TESSA, with floorplans and pre-loaded metrics embedded in the software and may eventually do the same with other clients. 

The business believes its asset-light business model will allow it to be globally scalable – it has already opened a US office in Seattle, led by alumni of the doomed modular firm Katerra, and is exploring a partnership in Canada. One of its founders is based in Vienna and is looking at the German-Austrian market, which it views as a good fit.

But Spiceley is keen to emphasise the importance of going steady. “We wouldn’t want our name associated with, you know, some people using the stuff recklessly or incorrectly across the world, he says. “That’s what people are paying for from us – the governance of the delivery of design and construction of these things”. 

If you’re not conforming with the way people procure, you’re going to find it difficult to get your product, whether its physical or digital, out to the market

Chris Spiceley, client accounts director, Modulous

Back on home turf, modules will be landing on site for its first physical development later this year. The 12-home Romney Avenue scheme for Bristol City Council, developed without the aid of TESSA, will provide proof-of-concept for the firm’s physical solution. Modulous was brought onto the project – originally designed by AHR Architects – to adapt it for offsite construction. The firm estimates that its solution will enable 50% time saving on delivering the project, as well as a 60% reduction in embodied carbon and 70% reduction in construction waste. 

The business theory behind Modulous is simple: build a good, reliable product that people want and give it to them in a way that is easily slotted into their processes.

For so long, modular and offsite construction has been the future that never quite arrived – theory failing to become practice. It may be too much to say that this year is make of break for Modulous, but as it makes its push for financial freedom, anyone with an interest in the future of construction should keep a close eye on the business in 2023.