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BuildDirect lands $27M to challenge brick-and-mortar home improvement stores

Look out, Lowes and Home Depot, there’s a new kid on the block – and this kid is smart, web-savvy, and Canadian.

You may not have heard of them before, but Vancouver-based startup BuildDirect is coming up fast. They sell home improvement supplies much like Lowes and Home Depot, but their business model is quite a bit different. Unlike most well-established home improvement retailers, BuildDirect doesn’t run any brick-and-mortar retail locations, and instead does all of its business through the Web. This allows the company to sell building supplies at steep discounts.

While eschewing physical retail locations in favor of an e-commerce platform isn’t particularly new or different, the company says the key to its business is predictive analysis. Using sophisticated data analytics, the company can more effectively predict what customers want and when they want it. The data also helps the company streamline the inefficient home improvement supply chain, thus minimizing shipping distances and driving down prices with bids from a network of different carriers.

And it’s definitely working. Last year the company posted roughly $100 million in annual sales, and also saw customer growth of more than 100 percent in that same period. Investors are starting to take notice of the company’s gains, as BuildDirect recently announced that it has raised $30 million CAD (roughly $27.3 USD) in its second round of funding. According to an interview with VentureBeat, the company will use this cash to scale up its team (from around 175 people to over 400 by the end of 2014) and add 20 new product categories to its site.

It’ll take a lot more than 30 million bucks to dethrone industry giants like Home Depot and others, but BuildDirect’s growth spurts are proof positive that the home improvement market is still ripe for disruption. 

What are your thoughts on the issue? Do you like the idea of buying building supplies online, or would you rather buy get your stuff from a physical retail store where you can see the products in the flesh? Sound off in the comments below.

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