Modulex Modular Buildings Plc. is a construction company with a difference — it is specialized in the development of environment-friendly modular buildings using advanced technologies like artificial intelligence and IoT. The UK-headquartered company’s technology helps reduce construction costs and save time. Recently, it signed a business combination agreement with PHP Ventures Acquisition Corp. to become a publicly listed firm.
In an interview with AlphaStreet, Modulex’s chief executive officer Suchit Punnose spoke about the company’s operations and planned Nasdaq listing.
Can you please provide an update on the business combination and planned Nasdaq listing?
We signed the definitive business combination agreement with PHP Ventures Acquisition Corp. in December 2022 and the transaction is expected to close as early as the second quarter of 2023. The transaction is expected to create a combined pro forma business value of $682.5 million with Modulex becoming a publicly listed company on the Nasdaq Capital Market under the symbol MDLX.
What is the nature of Modulex’s business and how is it different from other construction technology companies?
Modulex is a ConstructTech business delivering “Modular Buildings 2.0” – Carbon Net Zero certified IoT-enabled smart buildings designed using AI with quality assurance on the blockchain.
Modulex will take British steel modular building technology initially to India and five growth markets where long-term growing infrastructure needs are anticipated. The business model is to franchise the technology into the BRICS and N11 economies through wholly or partly owned franchises. A design center will be set up in the UK, from where design services will be offered to franchisees across the world using the IP that is developed on an ongoing basis and retained in the UK. Advanced designs combined with the latest building technologies will be used to deliver intelligent, smart buildings with very low operating carbon footprint.
Additionally, we’re planning a global rollout of 20 factories across 15 countries to meet the global demand for high-quality construction of structures in emerging markets. This plan is driven by our ability as a combined entity to develop our own MegaFactories where our 3D volumetric steel modular buildings can be manufactured at scale harnessing emerging technologies, such as Artificial Intelligence (AI), Blockchain & Internet of Things (IoT).
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What differentiates us is that Modulex has taken proven British steel modular building technology and enhanced it with AI, IoT, and Blockchain-based technologies, delivering carbon net zero certified buildings with a lower embedded and operational carbon footprint.
We have a novel business roadmap and technology model that puts Modulex in a position to directly address the shortage of affordable housing and other infrastructure requirements in emerging markets. Unlike the image some may have of the prefab slab systems of previous decades, Modulex modules enable the development of attractive buildings that meet the highest standards with a focus on extremely airtight structures that are energy efficient and fully mortgageable.
As mentioned above, Modulex is currently constructing a MegaFactory for steel modular buildings at a location in India from where we can export modules to the US, the UK, and the EU. The MegaFactory will be a 40-acre facility located 280 km from Mumbai. From here we will be able to produce fully fitted steel modular buildings, bathroom pods, doors, and windows. We have a steadfast commitment to carbon neutrality and innovation, combined with a determination to harness the power of emerging technologies to meet critical housing and infrastructure needs across the globe, at pace, and with optimal efficiency. That is the foundation this company was built on and what will continue to guide our actions.
Can you share your views on new trends in modular construction, as well as in the whole building industry?
Myriad trends are impacting the modular construction industry and they vary across regional markets. From a lack of regional resources to the lack of on-site laborers, the advance of technology continues to provide solutions before projects even begin. The demand for development in high-growth regions is driven by demands for cheaper, faster to build structures that are safe and sustainable. By leveraging our ConstrucTech solutions we are able to reduce the time and cost that historically hampered high-quality construction and provide solutions with the flexibility to adapt to the specific requirements of any given project.
Modular construction has moved away from precast concrete panels and has gained renewed attention, not only to meet immediate demands but as a solution with lower up-front and longer-term management costs, particularly in markets where labor and housing are in short supply. Modular construction no doubt will continue to evolve into a mainstream solution for commercial and residential structures.
How do you look at the ongoing economic uncertainty, in terms of its impact on the business?
Modular building solutions look even more attractive in down markets – it enables developers to assemble structures for the long term with the cost savings they need today. Independent of today’s market atmosphere, modular construction is gathering a fair share of attention from investors, not only from developers and decision-makers responsible for smart growth in rapidly developing markets. The innovation behind the products provides investors with assurance that they are supporting a company capable of intelligently facilitating the design, delivery, and installation of modules. The shift is in parallel with changes in the perception of prefab construction.
Our transaction highlights the immense value investors see in global construction technology markets and the solutions that companies like Modulex can provide. Since we announced the transaction, it has been welcomed as a value-driven opportunity for investors who immediately recognize our solid foundation, clear expansion roadmap, and ability to meet the rising demand in growth markets. We are continuing to gain the support of top-tier investors and access to the U.S. capital markets.
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Do you see any change in the business model after the company becomes a public entity?
With the closing of this proposed transaction, Modulex is positioned to be a leader in rapidly-developed buildings for emerging markets. Our advanced solutions enable structures to be available cost neutral and in most instances 30-50% faster than traditional construction. As previously mentioned, our model enables us to provide Carbon Net Zero certified, advanced 3D volumetric steel modular buildings embedded with EmergingTech such as AI, Blockchain, and IoT.
With a model that is ready to succeed, we’re initially focused on expansion and geographic diversification in India, Saudi Arabia, South Korea, Vietnam, Egypt, and Brazil followed by up to 20 factories in 15 countries.
The Combined Company is expected to receive net proceeds, after a $30 million financing, of approximately $82.5 million which among other things is expected to fund development for organic growth and expansion, including funding for five factories across South Korea, Vietnam, Brazil, Egypt, and the U.S. The group may seek up to US$30 million in pre-transaction financing, a PIPE, or other financing alternatives prior to the closing of the Business Combination.