Given that there are tens of thousands of suppliers in the flooring industry alone, the home improvement products marketplace seems made-to-order for an online platform.
Today, Vancouver-based BuildDirect, whose platform has been serving this market since 2002, announced it has nailed $43.7 million ($50 million Canadian) in new financing to keep matching buyers with materials.
The platform, intended for both B2B and B2C markets, connects homeowners and contractors undertaking home improvements with manufacturers, designers, building contractors, and shippers.
Founded way back in 1999, the company converted its platform in 2009 to a consignment and analytics-driven model that was designed to better predict demand.
Under consignment, manufacturers hold their wares at BuildDirect’s warehouses until they are sold, allowing the company to offer 48-hour delivery in most cases. The company said its analytics help manufacturers to better predict demand, and consumers save up to 80 percent.
Because the industry is so large, the platform began first by concentrating on laminate floor manufacturers, then added hardwood flooring, tile flooring, and more. In addition to flooring, categories now include landscaping, kitchen & bath, doors, and such building materials as siding and roofing.
The company will use the new funding to continue scaling the platform by building up the technical infrastructure, as CEO, cofounder, and former builder Jeff Booth told VentureBeat.
Along with the funding, BuildDirect announced it is adding tools so that users can join, utilize, and provide feedback in the platform without the involvement of the company’s staff, which previously had been required. There is also a new dashboard so that sellers can run “what if” scenarios on how their inventory, market share, or margins might change if they undertook different pricing.
A comparison to Amazon’s disintermediation is appropriate, in that BuildDirect is taking on the Home Depots of the world, not unlike how the world’s largest bookseller initially took on bookstores. And, just as Amazon built out its own delivery system, one of BuildDirect’s biggest challenges was to create its own delivery network for moving large supplies.
“Our competitors include the big box stores and anyone who sells building supplies,” Booth told us, noting that some of them sell online. But, he added, “we invented an entirely new channel, an end-to-end marketplace.”
“No other platform” offers this, he said.
BuildDirect has attracted truckloads of money this year. In January, it scored $23.6 million ($30 million Canadian), and the new funding brings the total raised so far to $96.2 million ($110 million Canadian). The investors in this round include Mohr Davidow Ventures, BMO Capital Markets, and OMERS.
“I liken this story to Sony, BMG, and Universal, when artists had to go through them” to get to consumers, Booth told us. “That’s where the big box stores are.”