Boxabl, Maker of Elon Musk’s $50,000 Tiny Home, Aims to Raise $50M


  • Elon Musk said he was living in a $50,000 prefabricated tiny home made by the startup Boxabl.
  • Boxabl’s cofounder said his company would try to raise $50 million amid a surge in interest.
  • But prefabricated construction has bedeviled some of the industry’s most experienced players.
  • See more stories on Insider’s business page.

The company that built the $50,000 375-square-foot prefabricated home that SpaceX CEO Elon Musk is living in at the rocket company’s base in South Texas has enjoyed the perks of being associated with one of the richest and most closely watched men.

The Instagram account of Boxabl, a Las Vegas firm that plans to mass-produce its microhomes on an assembly line in a nearby factory, has surge to 256,000 followers, and the startup has had tens of thousands of customer inquiries in recent months, one of its founders told Insider.

“It’s exciting. Things are accelerating for us quickly,” said Galiano Tiramani, 33, who cofounded the firm with his father, Paolo, in 2017. “It certainly helps us to be in the news, get more eyes on us.”

Next, it plans to raise $50 million from investors in the coming months, according to a July filing with the Securities and Exchange Commission. Rather than seek that money from venture-capital backers or other professional investors, it intends to crowdsource the funds from the public, riding on the wave of publicity it has received.

In a little-watched video posted by Boxabl in November, Tiramani first disclosed that the company was providing one of its homes to a “top secret customer” in Boca Chica, Texas, a tiny town along the Gulf of Mexico that has been virtually taken over by Musk’s rocket firm SpaceX.

Boxabl gained national attention when Musk said last month that he was living in the Boxabl unit after selling lavish multimillion dollar homes he had owned around the country.

The company hopes it can emerge as a dominant player in a surging market for accessory dwelling units (ADUs) — tiny housing units that states such as California have encouraged in an effort to relieve a shortage of homes and ease the affordability crisis many municipalities are grappling with.

But Boxabl has built only three homes, according to Tiramani. It is also focusing on an area of construction that has bedeviled some of the industry’s most experienced players.

Modular construction has long been viewed by experts as a way to defray the costs of building by using the efficiencies of mass manufacture. But transporting prefabricated homes from the factory to the customer is a logistical challenge that has prevented the methodology from gaining widespread adoption in the homebuilding industry.

A promising startup grows fast

Boxabl recently leased a 170,000-square-foot warehouse, a space larger in size than three football fields, in North Las Vegas. It says it believes there will be a big demand for stand-alone purpose-built microdwellings stamped out on an assembly line. The warehouse is populated by about 20 employees, Tiramani told Insider, most of whom are office workers. He imagines hundreds of factory laborers building thousands of homes there annually in the near future, he said.

The recent SEC filings that said Boxabl was moving forward its $50 million fundraising effort also showed the company lost $1,162,792 in 2020 and $707,547 in 2019. It has been planning the fundraise since early this year, well before the surge of attention it received in recent weeks. The company’s connection to Musk and the publicity it has received are likely to help the fundraising effort.  

A Boxabl Casita, which folds down for transport, under construction in a factory.

Boxabl


Boxabl previously raised $5 million, according to Tiramani, including a roughly $1 million stock sale earlier this year. According to filings with the SEC, the company previously sought to raise about $10.7 million. Tiramani said that about 40,000 people had reserved homes on the company’s website and that 2,000 had placed deposits of as much as $1,200.

He said he was focused on soliciting money from individual investors because he believed it would allow him and his father to retain more control over their company.

“I’m talking to venture-capital funds, but it’s just something that we don’t have to do, and we have rejected institutional money where they wanted to take control of the company,” Tiramani said. “The situation is better with individual investors. We remain in full control. We’re calling all the shots.”

The challenges of prefab construction

Tiramani said Boxabl had overcome the typical difficulties of transporting prefab houses in the design of its microhome, which it calls the Casita. The home has a large hinge, which permits it to fold like a suitcase and slim down to a width of 8 1/2 feet and allows it to be transported on roads like conventional cargo.

“What stopped factory-built housing from taking market share is it’s not compatible with highways,” Tiramani said. “Our core innovation is we fixed the shipping problem.”

Boxabl tiny home

The Boxabl microhome can be moved by truck via regular highways, unlike other prefabricated construction equipment, which requires special transport.

Boxabl


But there are other reasons prefabricated construction hasn’t taken root in the US. The country’s building codes and the regulatory agencies that enforce them have been slow to adopt new construction methods, experts say.

“Prefabricated housing is something that is outside of mainstream construction practices, and many building departments around the country are generally already overwhelmed,” Amir Shahrokhi, an architect and consultant for modular-construction projects, said. “They don’t have a lot of resources to deal with something that is outside of the existing codes.”

Efficiently and economically prefabricating structures that stand up to the varied conditions of the real world has also proved challenging. Katerra, a startup that hoped to vertically integrate construction using techniques that included prefabrication, recently filed for Chapter 11 bankruptcy, The Information reported.

Boxabl tiny home

Inside a Boxabl Casita.

Boxabl


Other players in the growing ADU business have focused on a different approach.

“If you look at places like San Francisco and Los Angeles, most of the ADUs are converted garages,” said Alexander Czarnecki, the 33-year-old founder of Cottage, a company that helps homeowners design and manage the construction of accessory dwellings and guides them through the inspection and permitting process. It has focused on predominantly converting garages because of the wider audience and lower costs.

Tiramani said he was undaunted by the challenges of prefabricated construction.

“As soon as this factory is proven, we’ll scale it big time and get into the automation you see in an automobile factory — full robotics and extremely fast,” he said. “Ford produces one F-150 truck every 53 seconds. There’s no reason why we shouldn’t be at the same level.”





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