Bay Area construction startup SupplyHound has raised $2.5 million in seed funding, the company announced Tuesday.
Founder Jim Margolis launched SupplyHound in 2019 with the goal of digitizing — and therefore optimizing — the materials procurement process for residential contractors and their suppliers. The app-based platform first offered its services in Marin County; it has since expanded to markets across the Bay Area and into Phoenix.
The startup will utilize the capital, led by Point72 Ventures, to accelerate the rollout of additional functions and features and increase customer acquisition and engagement, Margolis said.
The company also has plans to expand into a third market in 2022, though Margolis declined to give specifics. He declined to give the company’s valuation.
Margolis, a serial entrepreneur who has founded a half-dozen startups, said he was introduced to the world of residential construction while building a family home on Cape Cod in the mid-2000s. He witnessed firsthand the struggle and “friction” involved with materials procurement, saying contractors often communicate with their suppliers via a range of mediums, including in-person visits, emails and phone calls.
He said he wants to make SupplyHound the “system of record” for materials procurement — an efficient, organized way for contractors to connect with their existing suppliers. The platform also offers a two-hour delivery service, circumventing the sometimes-impromptu trips contractors or workers might have to make to a supplier to procure a particular item.
Covid has been a tailwind for the company, Margolis told me, in that suppliers are more motivated than ever to offer customers a digital interface through which to place orders. Suppliers like the kind SupplyHound works with — its customers include Bay Area building materials supplier Golden State and Ferguson Enterprises, the nation’s largest distributor of plumbing supplies — have historically struggled to break into the digital space. Margolis estimates less than 5% of their orders come in through digital channels.
“That is really how we can add value: by cracking the code on how to engage these contractors in a digital interaction around materials procurement in a way that supports existing relationships,” Margolis said.
