Source, an online tool for sourcing architectural finishes and materials, raised $1.3 million from investors as part of a $2 million round.
The company expects to raise the full $2 million, said founder and CEO Nicole Schmidt. That will bring the startup’s total funding to date to $5.2 million.
This round was led by existing backer Oregon Venture Fund and includes other existing investors, said Schmidt. Other existing backers include Founder's Co-op, Rogue Venture Partners, Rogue Women's Fund, Revolution's Rise of the Rest Seed Fund and MetaProp.
Source built an online platform that helps professionals in construction and design streamline the process of finding materials, obtaining samples and sourcing final orders for projects. The startup maintains a database that tracks manufacturer reps for more than 1,800 brands and more than 180,000 products.
This latest round will be used to continue its national rollout, something that was slowed last year during the height of the Covid-19 pandemic in the U.S.
“We see an opportunity right now as the world is reopening and looking to find (out) how we are going to work and what that looks like,” Schmidt said. She wants the company to be positioned within design hubs to cater to the needs of architecture and design customers for this new reality.
Like other industries, architecture and design will have some level of remote work and hybrid office models. Source will be able to draw on changes it made during the pandemic to fulfill customer needs.
A big element of Source is the company’s materials library. In Portland, it’s located at the company’s downtown office. There is also one in Seattle and libraries are planned for other cities. These spaces allow customers to see and touch samples of materials to help make selections.
However, once offices shut down, Source introduced same-day delivery of materials samples to customers in cities where libraries are located.
“It’s (a service) that absolutely came out of the pandemic,” Schmidt said. “It was not something we were thinking about doing.”
But, now it’s a service the company will continue as it expands libraries in more cities.
The company plans to open libraries in Honolulu, Phoenix, New York City and Chicago later this year. The startup is partnering with JLL Commercial Real Estate on these added locations. Schmidt and her team of 15 plan to return to their downtown Portland office July 7.
Another change Schmidt made during the pandemic that will continue is a shift in how the company generates revenue. The tool is now free for architects and designers and Source charges a fee to manufacturers for enhanced profiles within the tool.
Schmidt noted the search within the tool is still organic, so placement is not pay-to-play. Instead an enhanced profile includes more information from the manufacturer.
Despite ups and downs of construction during 2020, Schmidt said the company did see business grow as total usage grew across the country. Even in cities where the company doesn’t have a materials library, customers can still access the database and customer service tools to find and order items.
The company has seen $2.5 billion worth of projects managed through the platform. It works with 700 design and architectural firms across the country.
With this round, Schmidt expects to get the company well into 2022. Based on growth of the last several months she expects “great capital options moving forward.”
