A $100 million fund has been raised by a Material Bank to source architectural and construction materials with the assistance of robots. It has been announced that Material Bank, a company that runs a website that offers sample materials for architecture and design, has raised $100 million series C funding at a valuation of $1 billion from General Catalyst.
Material Bank, which runs an online marketplace for architectural and design sample materials, raises $100M Series C at a ~$1B valuation led by General Catalyst
It has taken Adam Sandow more than a decade to build up a portfolio of publications that includes Interior Design, Luxe and Metropolis, as well as a number of others. In the course of his work, he got an idea about a marketplace for architectural, design, and construction materials that would enable users to search for samples and order them using technology, thereby bringing new ease and efficiency to the old-fashioned sampling process.
Today, he is working on a fast-growing marketplace called Material Bank, which is receiving a lot of love from investors. In a video call, Sandow told Forbes in a video call from the company’s new warehouse in Olive Branch, Mississippi, the company had raised $100 million in venture capital at a valuation of almost $1 billion, a new warehouse in Olive Branch is partly funded by venture capital. As a result of the new investment, which was led by General Catalyst, Material Bank’s total funding now stands at $157 million. Sandow says investors have told him that they think that we have built a one-of-a-kind business based on the feedback they have given us.
It is expected that two key acquisitions will be closed this year, and Material Bank will launch new brands under the Material Bank umbrella as part of the new funding that will bring the company closer to consumers by expanding its core business, pursuing acquisitions and launching new brands under the Material Bank umbrella. It is expected that sales will pass $50 million this year, after doubling last year. There isn’t a lot of activity in this space, Sandow tells me, because there aren’t a lot of companies there. In other words, it is not gaming or AI or cryptocurrencies or electric vehicles where there are so many companies involved.”
Sandow, 52, was born and raised in Miami and has spent more than two decades expanding his eponymous media network. Among his notable accomplishments are the launch of Luxe in 2005 and his purchase of Interior Design from Reed Elsevier in 2010. I love design,” he says, “I grew up reading design magazines when I was a kid.” After a long career in the media sector, however, he became antsy to try something new. It is important to note that he still holds 100% ownership of Sandow’s media business, but he no longer oversees it on a daily basis.
The idea behind Material Bank is to provide designers and architects with the resources they need to source the materials they need. The architecture and design industries, historically, had to ask manufacturers for carpet samples, tile samples, and wall covering samples in order to make an informed decision. The fact that these samples were not easily trackable or kept up to date was a problem. In most cases, a delay in samples results in a delay in projects, resulting in enormous frustration and costs.
Comparatively, Material Bank aggregates materials from more than a hundred vendors in order to give users the ability to find the exact materials they are looking for within minutes. The managing director, Holly Maloney, at General Catalyst, says that Adam knew better than anyone else the inefficiencies in the market, as well as how to address them. There was a considerable amount of investment that would need to be made if he were to dedicate his time and attention to this venture because he already had a lot of success in the media space, and we were watching whether or not he would devote his time to this endeavor.”
As Sandow floated the idea in test conversations with brands and designers, he says, brands and designers immediately embraced the idea, but did not believe anyone would be able to handle tens of thousands of SKUs.
Obviously, technology has the answer to this problem, with a massive database containing close to a hundred million data points that can be searched by users to find exactly what they are looking for. At present, nearly 400 manufacturers, from Sherwin-Williams to Mohawk, list their products on the platform, and 60,000 designers, architects, hotel firms, fast-food chains, and the like are using the platform to search for products. It was Sandow’s own design publications that gave him the edge over the other designers to attract these users. The media side of the business has definitely given us an unfair advantage over our competitors,” he says.
In order to be included in the marketplace, manufacturers and vendors must pay a monthly fee of thousands of dollars in order to be considered for inclusion, and there are additional fees that must be paid when their items are ordered. In addition, the service is both free and fast for users.
After Material Bank expanded across the state line into a larger facility, it moved its headquarters to a larger, newly-built facility across the state line from its original Memphis building. Approximately 400,000 square feet of self-storage space is devoted to a warehouse in which robots adorned with the company’s name on them and bright yellow spines work alongside workers who pick items off seemingly endless shelves and place them on the bots, which will take them one step further until the order is complete. The number of materials we handle on any given night is tens of thousands of materials that are being shipped out to the industry, clarifies Sandow. “We wouldn’t be able to do this without the help of robots.”
This is a robot that belongs to Locus Robotics, one of the top warehouse robotic firms in the country. Thanks to the growth of e-commerce sales, the company recently reached a unicorn valuation. A few years ago, Material Bank became the first customer for Locus’ autonomous mobile robots, which it refers to as “LocusBots,” when it purchased ten of them to test one of Locus’ robots, the LocusBot. Currently, 150 of them are employed at Sandow’s facility, and the company expects to add another 50 of them within the next few months. There has been a synergistic growth between the two companies, according to Sandow.