BC Business
Jeff Booth and Robert Banks, co-founders of BuildDirect.com Technologies Inc.
BuildDirect, an online manufacturer and wholesaler of home building materials, announced Tuesday that it had raised $30 million in venture capital funding in a series B round led by California-based firm Mohr Davidow Ventures, with support from previous investor BDC Venture capital. The investment secures BuildDirect, a pioneer in the e-commerce space slammed hard by the end of the last tech bubble, as a challenger to bricks-and-mortar home hardware competitors such as Home Depot, Loew’s and Rona.
The company will use the funds to fuel growth, build out its online platform with 20 new product categories, and grow its team from 175 to 400 employees, according to CEO and co-founder Jeff Booth. The $30 million raise is BuildDirect’s second-ever institutional round, as it only began raising venture capital in 2012. Since then, its raised $20 million from OMERS Ventures and BDC’s IT Venture Fund. Founded in 1999 by Jeff Booth and Robert Banks, BuildDirect was hit hard by the dot-come crash and then the U.S. housing crisis. Conditions became more favourable after 2009, and since then the company has seen nearly 50 per cent growth in annual sales every year. As BuildDirect’s order size averages at 1,500 lbs-or $2,000-selling home improvement materials online is a bit more of a challenge than retailing books or shoes. Due to higher shipping costs and more expensive orders, home building industry has only slowly adopted to e-commerce, said BuildDirect’s head of IT to BCBusiness in August. Those challenges accounted for, the investment stands testament to BuildDirect’s smart e-commerce platform: over the past few years the company built out its online store with an eye on analytics, which has allowed it to optimize its inventory and logistics, and provide real-time feedback to suppliers.