Artificial intelligence construction startup Reframe Systems has locked down $20M in an early-stage funding round as modular homebuilding picks up speed across the multifamily sector.

With the cash infusion, Reframe will scale its microfactory model, which can get modular factories up and running within 100 days. It aims to build 1 million units in the next 20 years.

Reframe Systems builds microfactories in areas hit hard by housing shortages and natural disasters to produce small multifamily units, single-family homes, duplexes and townhomes — units that can hit the missing middle of housing affordability.

The Series A fund-raise was co-led by energy infrastructure investor VoLo Earth Ventures and Eclipse Venture Equity, which focuses on industrial, logistics, supply chain and healthcare infrastructure investments. Support came from MassMutual, Cubit Capital, Saga Ventures, Nor’easter Ventures and an RA Capital Management subsidiary.

Reframe Systems co-founder Vikas Enti is also co-founder of Eclipse, which provided seed funding to Reframe and raised $11M in a previous round. Enti was previously Amazon’s head of systems and robotics. Fellow Reframe co-founders Felipe Polido and Aaron Small also worked with robotics at Amazon before launching the company in 2022.

The factories' use of physical AI and robots slash construction timelines, are cost-effective and aren't affected by the labor shortage in the housing market, the company said. Homes are all-electric, and while most modular factories produce one standardized unit, Reframe uses AI software to customize units to comply with local zoning rules, fire codes and even neighborhood design styles.

“Because the system works the same way in every location, we can stand up new microfactories quickly and replicate that adaptability at scale,” Enti said in a press release.

Reframe said its model can start deploying homes within 100 days and build five single-family homes per week. An accelerated pipeline would ease strain on the construction backlog, which rose again in July. Nationally, the backlog is nearly nine months, according to a survey conducted by Associated Builders and Contractors.

Reframe has three projects in the works across the Boston area, delivering 20 units in Somerville, 12 single-family units in Devens and a Woburn tiny home. In California, the company is building a bungalow in Altadena and a microfactory in the area that was devastated by wildfires earlier this year.

Modular homebuilding is growing in popularity due to quick turnaround, efficient production and lower costs. The method made up 8.8% of apartment starts in 2024. Legislation was proposed this year to define modular housing, which is often confused with manufactured housing. Manufactured housing is completely built in a factory and moved elsewhere.

The bill also calls for the Department of Housing and Urban Development to examine how federal financing can benefit the method.