Mākhers Studio and Coralus (formerly SheEO)
About
Mākhers Studio is a for-profit green manufacturing and design-build firm that specialises in constructing customised modular spaces, or ‘Plug In Pods™’ using recycled steel shipping containers and renewable materials. Mākhers is a black female-owned and led business that was founded by Wanona Satcher in 2017, an Atlanta-based urban designer, landscape architectural designer, city planner and community engagement strategist.
The company has a small team: two full-time employees, three advisors (two of whom are female investors in the business) and sixteen subcontractors involved in the manufacturing of the Pods™.
Type of actor
Investee company
Investment type
Zero-interest debt finance, angel funding, crowdfunding
Operates in
Atlanta, Georgia, United States
Sectors
Sustainable construction / Modular housing / Manufacturing
To date, Mākhers has raised US$525,000 in pre-seed funding through a combination of zero-interest debt funding from Coralus (formerly SheEO, led by Vicki Saunders) and RSF Social Finance, an impact investment firm; angel funding; and early crowdfunding. This mix of investments and in particular the debt financing – has been critical in helping the organisation build its manufacturing facility and grow.
Mākhers has developed a suite of scaleable, green modular and prefab solutions in the built environment. Despite this, the startup has found it difficult to attract equity investment to scale, which mirrors broader trends in the United States and beyond where a microscopically small percentage of BIPOC-owned businesses receive investment to scale. For example, in the United States Black and LatinX women founders receive less than 1% in VC funding82 and over the past decade in the UK, only 0.02% of VC has gone to black women founders.83 Wanona believes their difficulty in attracting this kind of funding is also partly down to their focus on affordable housing. Instead, they have prioritised sourcing funding from majority womenowned non-dilutive investors whose values strongly align with theirs; these sources have enabled them to maintain full ownership of the business.
Approach
Mākhers Studio designs, builds and develops both commercial and residential real estate solutions for underserved communities, with a growing focus on developing affordable and climate-friendly multifamily housing. The organisation seeks to transform conventional building techniques through its ‘Factories-In-A-Box’: micro, neighbourhood manufacturing centres where subcontractors design, build and deploy their Plug In Pods™.
Built from recycled steel shipping containers via localised supply chains, Mākhers’ Plug In Pods™ have a far lower carbon footprint than conventional building solutions. This is significant given that the building operations and construction industry account for nearly 40% of global energy-related CO2 emissions.84 As well as limiting the emissions associated with the manufacturing and transportation of their building materials, the organisation is in the process of developing a range of new retrofits to boost energy efficiency in older houses with embodied carbon emissions.
Equity, racial justice, community ownership of solutions, and equitable access to capital and job creation lie at the heart of Mākhers’ sustainable construction approach. For Wanona, ‘affordable housing is one of the most critical components of an equitable community’ and the global housing crisis, fueled in part by gentrification, has meant that those typically on low incomes, the ageing population, and minority ethnic groups’ housing needs are increasingly not being met. These vulnerable groups continue to be displaced from their communities as multi-family homes and public housing blocks are being destroyed.
Mākhers seeks to restore this injustice, by building sustainable, affordable housing for underserved communities. Instead of capitalising on ‘destruction and extraction’, Mākhers’ model is grounded in principles of ‘efficiency and regeneration’, according to Wanona. Plug In Pods™ are built in residents’ backyards and near offices, libraries, grocery stores and schools, ensuring vulnerable groups can maintain access to important community services. Unlike many of their competitors, Mākhers has a workplace development approach that supports a ‘just’ and green transition; the startup employs local veterans, women from ethnic minorities, LGBTQ tradesmen and women contractors to help them build their Pods, creating new jobs and building skills for underserved members of the community.
At the core of Mākhers’ strategy is also an acknowledgement of the injustices that women in these communities are facing, and a gender lens has been applied at every stage of the company’s decision-making. Mākhers is black-female owned and its founder has been intentional about looking for predominantly female-owned and led investors.
“Affordable housing is one of the most critical components of an equitable community.”
In addition, the company is committed to hiring women, including immigrant, Spanish-speaking single mothers who often face discrimination in their communities, giving them the tools to build the change they want to see, and in turn inspiring more women and girls to become community builders. The company has also incorporated a gender lens into who it builds its properties for, and focuses particularly on the ageing population – of which a disproportionate number are women – and single mothers with children, who make up a large proportion of domestic abuse victims in the United States with no safe space to live.
Wanona’s own upbringing helped fuel her ambition to serve these members of the community in this way; she saw first hand the housing struggles her mother went through as a single parent, and had to travel a long way to access quality education as a child.
Impact
Since inception, Mākhers has successfully recycled 40 tonnes of steel with each project and supported underserved residents with greener, safe and affordable housing.
Key takeaways
Mākhers Studio provides an excellent example of how the green transition in the construction sector can simultaneously build wealth in low-income neighbourhoods and unlock local economic potential, through a focus on creating localised supply chains, jobs, and citizen-led solutions.
From an investment perspective, this example also sheds light on the vital need for the finance community to think beyond conventional real estate solutions when identifying sustainable companies to invest in, and prioritise long term products that promote equality and access for the most vulnerable.
What’s next?
Looking into the future, the organisation is committed to reducing the carbon footprint of its products through alternative materials and is currently working on building a new modular system using recycled steel and cross laminated timber, and prefabricated panels for residential retrofits. Their primary ambition is to expand geographically across the United States (Michigan and New York State initially) and globally, as well as boost their outreach to forge B2B collaborations with multinational companies like IKEA, and NGOs that support global economic development.
One key barrier for Mākhers to overcome concerns the underwriting and loan terms stipulated by many conventional banks. These tend to be overly complex for new construction methods like modular housing made from recycled materials, and many banks claim that as they have no experience underwriting these sorts of properties, they aren’t able to do so. Wanona describes a number of circumstances, where veterans living in trailers have been informed by the authorities that the land underneath their trailer is being sold, and have then expressed an interest in getting one of their Pods™. These developments have never gone ahead however, as the banks contacted were unable to provide loans to underwrite the projects. It’s clear therefore, that banks and alternative financiers must develop new and innovative forms of financing to effectively support equitable community development and innovations in cleaner, more durable construction.