In the first few weeks after the Russian invasion of Ukraine, Alexander Stepura was struggling to run his engineering company in Kyiv after 70% of his staff fled the capital.
Two years on, the struggle to find accommodation for his staff has grown into a business, HOMErs, which manufactures modular homes and has raised €500k from a personal network of angel investors.
The company’s story began one morning when one of his software engineers turned up at the office. “He said: ‘Hi Alex. I'm here but —actually —I'm not sure where I should live,'” Stepura tells Sifted. It turned out the developer’s house had been completely demolished and he’d lost all his money.
“That was the momentum,” Stepura recalls. “We had to find something for him.”
Like many other Ukrainian startups, it emerged to solve an emergency problem in a war-torn country — but over time, it’s turned out to be a solution that has wider uses.
Finding accommodation in Kyiv in March 2022 was a challenge: the rental market was non-existent so Stepura looked for a container where their employee could live. In the end, he decided he would build the house himself.
“We rapidly realised that products like this have tremendous global market potential,” said Chris Baxter, the company’s second cofounder.
Pretty potential
Modular housing is not a revolutionary idea — several startups are operating in the field in Europe, such as UK Vector Homes, Slovene Adria and German Luxhaus. But some of the most prominent of such companies have recently come across challenges: Legal and General’s £200m facility closed down last year, while the UK pioneer of modular houses Ilke Homes filed for administration last year with over £300m in debt. TopHat, which raised around £150m, has run rate losses of over £20m per year several years after launch.
HOMErs founders are not phased. They are not looking for huge funding rounds and explosive growth just yet, and their products differ from the traditional modular home.
They’re made of galvanised steel, not wood or plastic, which increases their life span. They’re also movable and flexible: the modular Lego-like design allows for fast assembly and disassembly as well as transportation in standard lorries (it takes a couple of weeks, the aim is to shorten it to three to four days). Modules can be added to extend or reconfigure the property, according to users’ needs.
And, above all, HOMErs houses, which come fully furnished, are simply very pretty. Smaller units look like tasteful chalets, while the more complex homes resemble high-end villas rather than emergency living containers.
“Version one is quite boxy, quite clunky, quite basic,” says Baxter, who lives in the HOMErs house just outside of London.
“I mean, Alex and team went from zero to producing a fully furnished property, which was connected to utilities comfortable to live in, in a matter of two or three months, which is quite remarkable. Now we actually have version three, which is quite luxurious accommodation.”
Way forward
The startup has already built 80 modular homes, most of them around Kyiv, for displaced Ukrainians.
The fresh funding will be needed because the company has just launched a new factory in Slovakia and is hoping to ramp up the production and global sales. It’s aiming to manufacture up to 100 houses this year and to double the number in 2025. In five years, the company plans to be on track to build 1000 houses per year.
The founders hope that their houses can be sold in the leisure industry — they make up for perfect holiday homes — but also to be a part of the solution to the global housing crisis. Baxter says that local councils have already enquired about whether HOMErs modules could be used for social housing.
“There's a global market for this product,” he says. “Affordable housing is in demand all around the world, partly for social needs. But also just flexibility for people who want smaller second homes that they can put on property or land that they own elsewhere,” he says.
Small simple three-unit fully furnished home in Kyiv costs $20k on a non-profit basis. A more sophisticated villa-like four-unit house with large terraces which will be produced in the Slovak facility will cost around €70k — modules can be added for €12k each.
The largest house HOMErs is building now has 12 units.
But while the commercial aspect of the business is “compelling,” Ukraine and its people remain the founders’ main focus.
“We do strongly believe that hopefully, in the near term, there will be some kind of resolution of the conflict,” Baxter says. “As soon as that's happened all of the money which is currently being directed to the war effort, you would hope that there will be a large budget allocation towards reconstruction.
“And the initial most important thing is going to be to repopulate the country and attract the 10m or 15m people who've left to return because without that you won't be able to rebuild society. And having a fast, comfortable living solution is going to be very important for that to happen quickly.”
