(Bloomberg) -- An arm of Brookfield Asset Management Inc. led a $175 million equity funding round for Material Bank, Chief Executive Officer Adam Sandow said in an interview.
New and existing investors including Fifth Wall also participated, he said. The round values the design materials marketplace at almost $1.9 billion, according to people with knowledge of the matter.
The transaction, by Brookfield Growth, marks an almost doubling of the $975 million valuation that the Boca Raton, Florida-based startup reached last April, according to data compiled by PitchBook. At the time, the company said it raised $100 million from investors led by General Catalyst and Henry Ellenbogen’s Durable Capital Partners, with participation from Bond, Lead Edge Capital, Bain Capital Ventures and Raine Ventures.
Material Bank operates a marketplace for sampling of architectural, design and construction materials, such as paints and wood panelings, with next-day delivery. While the platform is free to use for design professionals, Material Bank earns revenue by charging its brand partners, and expects to eclipse $100 million in revenue by the end of 2022.
“Material Bank is reinventing the way in which architects, designers and corporate users search and sample,” said Josh Raffaelli, a managing partner at Brookfield. “This instantly connects hundreds of suppliers with target customers and streamlines a historically lengthy selection process. As one of the largest developers in the world, Brookfield is a proponent for standardizing the sampling and specification process to build beautiful spaces in a sustainable and efficient manner.”
The funding will be spent in part on developing new tools, fueling international expansion -- initially in Europe -- and for strategic acquisitions, Sandow said. Already, it has snapped up U.K. procurement platform Clippings and software-development company Amber Engine.
“As we enter an uncertain economy, it’s important to have a fortress balance sheet,” said Sandow, adding that the fresh funding will also be used to further automate Material Bank’s logistics center in Memphis, Tennessee. The center provides next-day delivery of material samples in a single box, an effort that the startup says promotes sustainability and decreases packaging waste.
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