The first order was 300 apartments. The client was Alphabet. The factory was a decommissioned WWII submarine shipyard on a former naval base in Vallejo. This is how Rick Holliday chose to address the Bay Area housing crisis - with the same industrial logic that once built vessels for war.
Holliday, a UC Berkeley-trained urban planner who spent four decades developing affordable and market-rate housing across the Bay Area, co-founded Factory OS in 2017 with Larry Pace. The premise was defiantly simple: build apartments the way Detroit builds cars. In a factory. Off-site. With union labor. At scale.
The Shipyard Gambit
Factory OS occupies 250,000 square feet on Mare Island - the same naval base where submarines were repaired during World War II. There's something deliberate about that choice. The industrial infrastructure that assembled wartime machinery now runs precision assembly lines for apartment modules that roll out of the factory and stack on job sites like Legos.
The numbers are not subtle. A 100-unit building, which typically demands 12 to 18 months of on-site construction with all the chaos that entails - weather delays, labor coordination, supply chain snags - can be erected in under 10 days using Factory OS modules. Foundation work proceeds simultaneously with factory assembly, compressing timelines in a way that traditional construction simply cannot match.
On one San Francisco nonprofit project, the modular approach cut construction time in half and reduced costs by 30%. On a Lake Tahoe affordable housing development that penciled out as financially unviable with traditional methods, the redesign for modular construction saved $6 million - enough to make it happen.
"If you build a house or an apartment more like a car, in an industrialized fashion, you can do it much faster, higher quality, and less expensive."
- Rick Holliday, CEO & Co-Founder, Factory OSFactory OS vs. Traditional Construction
Forty-Five Years of a Single Idea
Before Factory OS, before the Series B, before Google's first apartment order arrived, Rick Holliday had already been building Bay Area housing for the better part of five decades. The thread connecting all of it is not ambition or ego - it's a specific, persistent conviction that the built environment shapes communities for generations, and that the people who change it carry a long responsibility.
In 1978, he co-founded Eden Housing in Hayward - one of the earliest organizations focused on creating permanent affordable housing for California's workforce and formerly homeless residents. Then, in the early 1980s, he partnered with housing visionary Don Terner to establish BRIDGE Housing, a nonprofit developer that has since become one of California's largest and most respected affordable housing organizations. Holliday served as Vice President and later as Board Chair.
In 1988, he stepped out on his own. Holliday Development was founded to pursue a different kind of urban transformation: the rehabilitation of former industrial buildings into mixed-use, live-work communities. He was among the first to import East Coast-style loft living to San Francisco's South of Market district - before SoMa became the address of choice for every technology startup in the hemisphere. By the time the neighborhood's reputation caught up to his investment thesis, Holliday Development had completed 16 residential projects and created nearly 1,000 units across the Bay Area.
How Factory OS builds an apartment
Silicon Valley Bets on Bricks
The Series B round closed in November 2020: $55 million. The names on the cap table read like a who's-who of Bay Area institutional power. Google. Facebook. Autodesk. Citi. Morgan Stanley. Lafayette Square led the round. These were not passive bets on a feel-good housing startup - they were strategic investments from companies that need workforce housing to exist in the region, and from technology firms betting that construction itself could be industrialized.
Autodesk's involvement was particularly telling. The company makes BIM Collaborate - the digital design software that Factory OS uses to coordinate its precision manufacturing. Their check was not just capital; it was an endorsement of the entire software-enabled construction thesis. Total funding reached $77.7 million across Series A and B.
Series B Backers - $55M Round (Nov 2020)
Total funding raised: $77.7M across Series A and B. First client: Alphabet (Google parent company), ordering 300 modular apartment units.
The Arithmetic of the Housing Crisis
California's housing shortage is not a mystery. It is a mathematical problem. Too few units are being built. The units that are built cost too much. The gap between what working people can afford and what developers can profitably construct has widened to the point that entire categories of workers - teachers, nurses, service staff - cannot afford to live near the cities where they work.
Holliday's answer is not policy or subsidy alone - it's physics. If you compress the timeline by 40%, you reduce carrying costs. If you standardize factory production, you eliminate waste and cut materials costs by 20-30%. If you allow simultaneous construction (factory assembly and site preparation at the same time), the compounding time savings change the whole pro forma. A project that doesn't pencil out in traditional construction suddenly works in modular.
Factory OS partnered with UC Berkeley to study and document these efficiencies - a research collaboration that lends academic rigor to what might otherwise be dismissed as developer boosterism. The Housing Innovation Lab at Berkeley has worked closely with the company to quantify the savings and refine the production process.
"When you build something, always respect that you're changing the environment that everybody else has to live with after you're gone."
- Rick HollidayWhat Kind of Person Does This
Rick Holliday lives in Berkeley and drives a 2008 Hybrid Nissan Altima. That detail - unremarkable car, modest vintage, hybrid before hybrids were required - rhymes with the rest of his operating philosophy. He's a man who has spent nearly five decades building homes for other people and appears genuinely uninterested in broadcasting himself. The work, reliably, comes first.
He plays tennis. He graduated from UC Berkeley with an undergraduate degree in Urban Planning Policy and returned for a master's in City and Regional Planning. He stayed in the Bay Area. He stayed in housing. He kept building. The career has the quality of a long game being played by someone who decided very early what they cared about and has simply, persistently, built toward it ever since.
His most important life lesson, according to a profile from the period: making the most of each day. Not a maxim you'd find on a VC's Substack, but one that matches the pace and output of someone who has been doing consequential work since 1978 without stopping.
"We're demonstrating we can save money and time, and quality's higher."
"It's the wave of the future." - on offsite modular construction
"If you build a house more like a car, in an industrialized fashion, you can do it much faster, higher quality, and less expensive."
"When you build something, always respect that you're changing the environment that everybody else has to live with after you're gone."