By Konrad Putzier

Construction startup Katerra is replacing its chief executive and has secured new funding, as the firm tries to navigate a sharp industry slowdown caused by the pandemic.

Paal Kibsgaard, the former chief executive of oil services firm Schlumberger Ltd. and most recently Katerra's chief operating officer, is taking over the helm on July 1. Michael Marks, who co-founded the company in 2015, is stepping down, Katerra said.

Katerra said Mr. Marks wants to focus full time on his venture-capital firm, WRVI Capital.

In his statement, Mr. Marks said "operational excellence will be instrumental to our long-term success as we come out of the Covid crisis, and now is the right time to put Paal's experience to work as CEO."

Katerra also said it would receive $200 million in new funding from its biggest backer, SoftBank Group Corp., bringing its total venture funding to more than $2 billion.

Katerra has said it aims to make the construction process cheaper and faster by assembling more building parts in factories. The company employs around 8,000 people and is currently building about 6,000 apartments around the globe. It has signed contracts with the Saudi Arabian government to build more than 12,000 homes in the country.

But its growth has been bumpy. Some of its U.S. projects had delays and cost overruns, and in December the company closed its Phoenix factory. The company's other co-founder, Fritz Wolff, left the board last year.

The coronavirus pandemic adds another challenge. The company had to temporarily wind down projects in Washington state and New Jersey following government orders restricting construction work, and saw its India projects shut down, although some are starting again, Mr. Kibsgaard said.

A prolonged economic malaise could also hurt its business. "If there is a slowdown in the startup of new projects, that is something we need to be prepared for," Mr. Kibsgaard said.

Mr. Kibsgaard said part of his job will be to stanch losses at the company, which has invested heavily in its growth. "There's a primary focus and an urgency of getting into at least cash-flow neutrality," he said.

The Norway native joined Katerra's board in 2016 and became its COO last year. He served as CEO of Schlumberger, the world's largest oil-field-services company, for eight years until 2019.

Mr. Marks's departure marks the second time within a year that a chief executive is leaving a SoftBank-backed real-estate company. In September, WeWork's co-founder Adam Neumann left the company a month before a multibillion-dollar bailout by SoftBank.

Write to Konrad Putzier at konrad.putzier@wsj.com