Summary:

Online building materials wholesaler BuildDirect has raised a $27.3 million series B funding round, but it’s not the company’s products or breadth that have investors pumping money into — it’s how smart the company uses data.

wood

BuildDirect, a Vancouver-based company provider of discount home-improvement products, has raised a $27.3 million ($30 million Canadian) series B round of venture capital led by Mohr Davidow Ventures. A big key to the BuildDirect’s success so far is that it was created around the idea of smart data analysis, which has allowed it to optimize its inventory and logistics in order to run as efficiently as possible.

Selling building supplies to do-it-yourselfers and contractors online can be tricky, especially because shipping costs can get expensive when you’re talking about hundreds of thousands of pounds of materials. I spoke with BuildDirect Founder and CEO Jeff Booth in late 2012, and he explained to me how the company is able to sell an average of about $2,500 per order because it knows what consumers want, where they want it and how much they’re willing to pay to ship it. For example, BuildDirect’s models help it figure out which warehouses will likely minimize the shipping distance for each product, and a network of carriers bids on prices for delivering orders.

To hear a little more about how BuildDirect operates, check out this Structure Data 2013 session featuring the company’s CFO, John Sothan. And, of course, check out this year’s Structure Data conference in March to hear about more about how smart companies (Airbnb, Google, Ford Motor Co. and more) are using data to make better products and run smarter companies.

Comments have been disabled for this post