Montréal-based startup RenoRun has raised $181 million CAD ($142 million USD) to scale its building material delivery model across North America.
The company’s Series B round, which closed in late December, was co-led by New York’s Tiger Global and California-based Sozo Ventures with support from a large and diverse group of new and existing investors. RenoRun’s financing included an unspecified amount of debt and secondary capital. The company declined to disclose the exact breakdown to BetaKit, along with who sold shares as part of the round or RenoRun’s valuation.
In its quest to build “the world’s most contractor-centric brand,” RenoRun plans to expand beyond simply selling and delivering building materials.
Part of a growing wave of construction tech companies, RenoRun describes itself as “the most efficient way of getting last minute construction materials delivered to construction job sites.”
In an interview with BetaKit, RenoRun co-founder and CEO Eamonn O’Rourke spoke about where the startup fits into the building materials market, and the opportunity to take the “back office-running of a construction project off of the contractor’s hands” through a platform that includes a FinTech product.
RenoRun offers an e-commerce platform for building materials like lumber, drywall, hardware, doors, and paint, taking orders through its desktop site or mobile app, which is available for Android and iOS. The company delivers these materials from local hardware stores and its own network of warehouses to residential construction job sites within two hours. RenoRun currently serves six cities in Canada and the United States (US): Montréal, Toronto, Boston, Chicago, Philadelphia, and as of today, Washington.
A number of new firms invested in RenoRun for the first time as part of this round, including Investissement Québec, SE Ventures (Schneider Electric’s venture arm), Los Angeles-based Fifth Wall, Desjardins Capital, Vancouver’s Nicola Wealth, Export Development Canada, TriplePoint Capital, and two BDC funds, the Women in Technology and Growth Venture Co-Investment Fund. The round brings RenoRun’s total funding to over $207 million CAD ($163 million USD).
This contingent was joined by a group of strategic investors that includes executives from Menlo Park’s GGV Capital, San Francisco proptech firm Opendoor, Montréal-founded travel tech firm Sonder, and the founders of Québec meal kit delivery firm Goodfood.
A string of Canadian VC firms that have helped RenoRun get to this point — Real Ventures, ScaleUP Ventures, Inovia Capital, and Maple VC — also supported the startup’s Series B round, alongside Obvious Ventures and Silicon Valley Bank. Inovia previously led RenoRun’s $22.5 million 2019 Series A round, while Real and ScaleUP backed RenoRun’s $3 million 2018 seed financing.
Prior to RenoRun, O’Rourke spent over 20 years working in the construction industry in Ireland, Australia, and Canada, where he saw the market’s need for speedy building material delivery firsthand. In 2017, O’Rourke teamed up with co-founders Joelle (VP of culture) and Devlin Chartrand to launch RenoRun.
“RenoRun on the outside looks like a delivery company,” Real Ventures Partner Sam Haffar told BetaKit. “RenoRun on the inside is a completely different stratosphere, it’s a completely different planet.”
“We’re working towards a full-blown marketplace, a one-stop shop, in the future,” Inovia Partner Magaly Charbonneau, who sits on RenoRun’s board, told BetaKit. “We believe that this is our biggest differentiator.”
When RenoRun launches in a city, it typically begins with picking from local stores such as Home Depot and Home Hardware. When it establishes more of a presence and builds up enough volume, the startup opens its own local warehouses. Each market is different, but RenoRun’s supply model is flexible enough to support suppliers and/or owned warehouses based upon contractor needs.
ScaleUP Partner Matt Roberts told BetaKit this warehouse-based approach gives RenoRun strong margins. “The economics of the business are incredible,” he said.
As part of the company’s Series B round, Sozo Ventures founder and General Partner Phil Wickham has joined RenoRun’s board as a director, replacing Roberts, who now serves as an observer.
Haffar, who also sits on RenoRun’s board, cited the startup’s “advanced” supply chain and logistical capabilities and subscription model as further evidence of what sets RenoRun apart from other players in the space. “We pioneered the subscription model in construction for materials,” he said. “We see that as a springboard for a lot of amazing opportunities.”
“RenoRun is transforming a huge, important, and inefficient construction logistics market and the proof is in the excitement, and frankly zealotry, for the RenoRun platform and services that we felt from the company’s customer base,” added Wickham.
Sozo, which has backed American tech giants like Square, Twitter, and Coinbase and Canada’s Clearco, co-led the round with Tiger Global, which has developed a reputation as a hyper-aggressive and prolific investor. In recent months, Tiger has invested in other Canadian tech companies like Vancouver-based Klue, and Toronto’s 1Password and Float.
As the residential construction sector contends with global supply chain issues and construction material shortages, RenoRun touts itself as a solution that “helps alleviate the stress of juggling multiple vendors and sourcing materials, letting builders and their crews focus on building.”
Over the past 12 months, RenoRun has launched in three US cities. The company’s business “exploded in 2020, and continued to grow incredibly aggressively in 2021” amid a surge in home sales that O’Rourke noted led to an increase in remodelling projects. The CEO said that RenoRun continues to grow 2x to 3x year-over-year, adding that it expects to exceed nine figures in revenue in 2022.
COVID-19 has put pressure on the traditionally conservative construction industry to modernize and adopt tech, benefitting companies like RenoRun and Toronto-based Tread, which are part of a growing list of Canadian firms looking to bring tech solutions to the construction sector. This group includes Kitchener-Waterloo project management software firm Bridgit, Calgary manufacturer Falkbuilt, Ottawa delivery company GoFor, and Toronto e-commerce marketplace Brokrete.
Vancouver-based firm BuildDirect provides an online marketplace for buying and selling building materials that, like RenoRun, focuses on the home improvement sector, while Montréal startup Billdr offers a home renovation marketplace.
Like RenoRun, Toronto-based TOOLBX also provides delivery of construction materials. However, TOOLBX offers delivery directly from retailers like Home Depot and Rona, while RenoRun offers a mixed model, delivering from said retailers as well as from its own supply of materials, obtained directly from suppliers and housed in warehouses.
O’Rourke said some of the other companies in the sector are trying to tackle last-mile delivery, while others are trying to approach the problem with a conventional marketplace with multiple vendors. According to the CEO, RenoRun is building “a vertically integrated e-commerce platform.”
“Our goal in each market we operate in is to have the most comprehensive building material catalogue in the city,” said O’Rourke. “We do that by working with multiple suppliers and distributors.”
“RenoRun on the outside looks like a delivery company. RenoRun on the inside is a completely different stratosphere.”
-Sam Haffar, Real Ventures
RenoRun’s main competitors are traditional hardware stores that offer their own delivery services. On the startup side, the company’s US competitors include Curri, while Brazil’s Oico is also taking a similar approach.
Ultimately, RenoRun aims to build “the world’s most contractor-centric brand”—which entails expanding beyond simply selling and delivering building materials.
“The way we do that is by helping them run their job sites more efficiently,” said O’Rourke. “So not just with the building materials that we offer, we’ve also started to build out a FinTech product that will help them finance a portion of the materials sent to the job sites, and then … as the product continues to grow, continuing to help them streamline their their actual jobs sites to make them more efficient.”
Over the rest of this year, RenoRun plans to continue expanding across the US. O’Rourke said the company is eyeing some cities on the west coast, and aims to establish a strong presence in major US markets.
RenoRun has just over 500 employees currently. To fuel its growth, the company plans to double its headcount over the next 12 to 18 months.
Feature image courtesy RenoRun