The api side of Redwood is transpiled by Babel into the ./api/dist folder.
To emulate Netlify's build steps locally:
yarn rw build api
cd api
yarn zip-it-and-ship-it dist/functions/ zipballs/Each lambda function in ./api/dist/functions is parsed by zip-it-and-ship-it resulting in a zip file per lambda function that contains all the dependencies required by for that lambda function.
The web side of Redwood is packaged by Webpack into the ./web/dist folder.