Companies & Industries

Vancouver's BuildDirect scores $30 million in growth funding

CEO plans to add 300 employees

BuildDirect founder and CEO Jeff Booth (BuildDirect)

BuildDirect founder and CEO Jeff Booth (BuildDirect)

When Jeff Booth started BuildDirect in 1999, the venture capital cycle was near its all-time peak. As the recipient of a new, $30-million round of financing announced Jan. 21, he feels he’s almost come full circle.

That’s not to say venture capitalists and the companies they invest in haven’t learned anything from the past. The new money comes primarily from Mohr Davidow Ventures, a Silicon Valley-based VC. Existing investors such as BDC Venture Capital also anted up.

As for taking BuildDirect public, “we could do that today,” Booth says. But he’d prefer to take his time and “do it right.” BuildDirect is a web-based supplier of building materials to professional and do-it-yourself builders, an enormous (nearly US$500-billion) market—especially now that housing prices and investment is recovering in the U.S., where BuildDirect has 10 of its 12 warehouses. “We believe it could be an Amazon-sized company in Canada,” Booth says.

That’s one of the factors driving the recent surge in Canadian VC financings, he adds: Canadian companies learned over the drought years to dream big in order to catch the attention of investors outside the country. (Such, certainly, was the case in the unprecedented $100-million-plus financings of Shopify and HootSuite over the past six months.) And on the buy side, American VCs have discovered a better supply/demand environment for deals north of the border.

BuildDirect plans to add 300 employees to its existing 175-head payroll this year, with most of the hires at its head office in Vancouver, Booth says.

Like most successful e-commerce companies, BuildDirect strives to take out some of the layers between supplier and end user, reducing prices in the process. Its predictive software tells manufacturers what to ship to the warehouse—on consignment, meaning BuildDirect does not carry inventory on its books. The best indicator that the system works, Booth says, is the fact that just one out of 130 manufacturers has pulled out of the arrangement since its inception four years ago.

“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,” Mohr Davidow general partner Katherine Barr said in a release. “With this latest round of funding, BuildDirect is well-poised to fulfill its goal of transforming the home improvement industry by leveraging its innovative data analytics and technology platform.”