In a home-building market worth $492 billion, Vancouver’s BuildDirect has taken a major step forward.
The online supplier of home improvement products has raised $30 million in series B money. The cash is expected to go to a lot of different things: growth, both in terms of head count and innovation, development of its platform and expanding its product offerings.
The round was led by Mohr Davidow Ventures and supported BDC Venture Capital, among others. It comes in addition to $16 million the company raised last year with OMERS Ventures, the venture capital arm of the Ontario Municipal Employment Retirement System.
“Despite its multi-billion dollar size, the home improvement product supply chain is fragmented and inefficient. In the past several years, BuildDirect has achieved phenomenal growth by effectively leveraging sophisticated predictive analytics to address gaps and inefficiencies in the home improvement products industry,” said Katherine Barr, General Partner, Mohr Davidow Ventures. She will now join the company’s board of directors.
From a builder’s standpoint, BuildDirect seems to be like an Ikea for builders, providing access to a wide variety of building materials for lower prices, while maintaining quality.
But through custom web analytics and forecasting tools, BuildDirect is reinventing and redefining how consumers can receive the best prices for their home or renovation needs without sacrificing quality. For manufacturers, BuildDirect identifies in real time how a product is performing, forecast trends and pinpoint production needs to improve manufacturing efficiencies. It tells them which products and colours are going to sell, saving them “a whole bunch of money” as the company told the Vancouver Sun.
“Since its inception, BuildDirect has been steadfastly working to change the dynamics of the home improvement products industry,” said Jeff Booth, CEO, BuildDirect. “As a builder I experienced the pain, complexity and lack of customer support when it came to finding high quality products at an affordable price. With goods changing hands multiple times from manufacturer to retail, these suppliers lose touch with consumer demand, their product costs’ increase at each turn, and no one along the chain is willing to take responsibility for a missed deadline or product quality issue. The consumer assumes the padded costs and risks. This process does not make any sense.”
That supply chain has typically be so “broken” that contractors and consumers regularly experienced “missed deadlines, materials that don’t arrive on time, budgets that skyrocket, and other home improvement and construction fiascos,” wrote the Sun.
But his platform now offers a simple online shopping experience where consumers can access savings of up to 80 percent for high quality products supported with coordinated shipping for goods that average 1500 lb and a 30-day satisfaction return guarantee with free shipping. Meanwhile the suppliers can reach an “unlimited marketplace” without sacrificing margins.