BuildDirect raises $50 million, looks to become Amazon of home improvement

Jeff Booth | BCBusiness
BuildDirect CEO and co-founder Jeff Booth

Vancouver e-tailer’s funding round clocks in as one of the biggest in Canada for 2014

Vancouver tech company BuildDirect Technologies announced Wednesday that it had raised US$50 million in financing from a mix of Canadian and U.S. venture capital investors in its fifth round to date. Led by previous investors OMERS Ventures and California-based Mohr Davidow Ventures, along with new investor BMO Asset Management, the round brings the company’s total funding to US$112 million.

The investment is “a strong signal for the support and belief in BuildDirect’s approach to technology, data anlytics, logistics and our ability to rebuild the broken home improvement industry,” said Jeff Booth, BuildDirect CEO and co-founder in a statement. “We will continue to scale at an incredibly fast pace,” he said.

An online store that sells everything from daybeds to bathtubs and roofing to consumers and subcontractors, BuildDirect chalks up its competitive advantage to its back-end analytical and forecasting tools, which allow product manufacturers to access to real-time consumer demand, thereby reducing freight and warehousing costs. Those savings are then passed on to consumers, or so says the company. 

BuildDirect made aggressive moves into the $500-billion home improvement market in the U.S. and Canada, going up against brick-and-mortar heavyweights such as Home Depot and Rona. While the privately-held company does not disclose its numbers, its sales have increased 50 per cent year-over-year since 2009, with the average order clocking in at US$2,000.

“Old-world industries are breaking down and companies that leverage technology and data analytics are putting the power in the hands of both the supply and demand side,” said Katherine Barr, general partner at Mohr Davidow Ventures and a BuildDirect board member. “[The company] is disrupting the existing supply chain in this industry and building a completely new, highly efficient and smart system.”

Founded in 1999, the Vancouver-based company has raised over two-thirds of its funding in 2014 alone. With the $80 million in total that the company has raised this year, Booth expects the company to increase its workforce from 175 to around 400 employees.