This startup raised $10 million to make disaster relief smarter, cheaper, and safer by Erin Griffith @FortuneMagazine March 4, 2015, 10:20 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons In developing the prototypes for its 80-square-foot Exo shelters, Reaction Housing, a startup based in Austin, Texas, realized that the available materials and vendors didn’t meet its performance criteria. The units needed to last five to 10 years, but early dives into the supply chain didn’t look promising. So the company found itself inventing new materials and manufacturing processes, CEO Michael McDaniel says. Today, Reaction Housing has pre-sold hundreds of its Exo units. It projects that it will sell thousands of units this year. This week, the company announces that it has raised $9.8 million in Series A Venture funding led by Riverwood Capital. The funding comes on the heels of the company’s $1.5 million seed funding, which it used to grow its team from three to 24 employees, including COO Graeme Waitzkin. Besides their cool, futuristic appearance, the startup’s Exo shelter has a variety of selling points: They are stackable, and 16 units can be loaded in the back of a semi truck. They are customizable and “smart,” with features like HVAC systems and digital door locks. They sleep four adults and can be lifted and assembled by four people in a matter of minutes. (It’s just two pieces, a shell and a base.) They can be connected to a source of electricity, including solar panels or car batteries, if available. The interior of the Exo.Courtesy: Reaction Housing And most importantly, they’re affordable. The units cost around $6,000 for the basic disaster relief version and go up to $10,000 for more tricked-out commercial units. The company expects disaster relief to make up the bulk of its sales. But there has been demand from companies seeking workforce housing and organizers of events like music festivals. One surprising area of demand is the medical field. The need for housing related to the Ebola crisis in Africa, for example, introduced a potentially new use for the Exos, McDaniel says. Still, $6,000 is a much bigger investment than say, a tent. For example, a charity called ShelterBox provides necessities such as tents, thermal blankets, and water purification tools in a small box for a fraction of the cost. But McDaniel is trying to solve the problem of people who are displaced for long periods of time, which can end up costing tens or even hundreds of thousands of dollars. Many hurricane victims end up living in hotels on the government’s dime. The RVs the federal government purchased for Hurricane Katrina victims cost an average of $65,00 each and were not reusable. The Exos are designed to be different. Reaction Housing will use its funding to build out a recently-leased 32,000 square foot factory in Austin. Currently, units are produced in a temporary facility. With its new facility built out, Reaction Housing will be able to make 600 units per month.