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 (Amy Feldman/Forbes)
Adam Sandow spent the past several years building up his collection of magazines that comprise Interior Design, Luxe, and Metropolis. Through this endeavor, he came up with the concept of a market for architectural, construction and design materials that could provide technology-based search, efficiency and convenience to the old process of handling material samples.
His business, Material Bank, is the latest company to attract the interest of investors. Material Bank, a New Yorkand Florida-based firm, has raised $100 million in venture capital with an estimated value of $1 billion, Sandow told Forbes on in a live video call from the new headquarters of the company located within Olive Branch, Mississippi. The latest venture, directed by General Catalyst, brings Material Bank’s total investments 157 million. “The feedback that we’ve received from investors is that we’ve built an unrivalled business,” Sandow says.
With the new funds the bank claims Material Bank is expanding its main business, pursuing acquisitions (with two transactions expected to be completed at the end of this year) and developing innovative products that fall under the Material Bank umbrella that could increase the accessibility of the company to its customers. The company’s revenue increased by a third this year, and are forecast to hit $50 million at the end of this year. “There’s not a thriving business cluster within the industry,” Sandow says. “It’s not crypto, gaming, AI or EV, in which there are a lot of companies.”
Sandow 52, from the United States, was born in Miami and has spent the past 20 years expanding his own media firm, including the debut of Sandow’s scratch platform in 2005, and the acquisition of Interior Design from Reed Elsevier in 2010. “I am a big fan of design,” he says. “When I was young I was a reader of design magazines.” After many years working in the field of media, he was intrigued by exploring a new route. Although he is still sole proprietor of Sandow’s media firm but he has taken a step away from daily operations.
In the year 2018, he launched Material Bank with the idea of aiding architects and designers in finding the appropriate materials. Before, designers and architects would have to contact manufacturers to obtain carpet samples as well as tile samples and wall covering samples. Architects and designers were able to request manufacturers for carpet samples tiles samples, carpet samples, as well as wallcovering samples. There was no way to track the samples or to keep them up-to date. The delay in the samples can lead to delays in projects that usually cost lots of money and can cause many frustrations.
Material Bank, by contrast is a selection of the offerings of numerous suppliers giving customers the ability to find the product they need within a matter of minutes. “Adam recognized the shortcomings of the market more than anyone could,” says Holly Maloney Director of Management for General Catalyst. “We looked at whether this was something he could devote his time to , since he’d previously had a number of success in the media field and there was going to be an enormous amount of capital investment needed.”
The moment that Sandow began to talk about the idea during a series of test discussions, both brands and designers were impressed with the idea. Sandow says that he was skeptical of the notion that anybody could handle tens of hundreds of SKUs. “These businesses would say, “We’re unable to manage this on our own. how do you manage 1,000 products from the best brands?”
The solution, naturally was technology, and that includes the enormous database that has over 100 million data points, allowing users to search and find the exact product they are searching for. More than 400 companies such as Sherwin-Williams (paints) along with Mohawk (carpets) have showcased their products on the site as well as more than 60,000 designers, architects hotels, fast-food restaurants, and hotels chains have signed up as users.In order to draw the right clients, Sandow relied on an unknown advantage in his own design magazines. “The advertising aspect of the business provided the company an advantage that is unfair,” Sandow says.
The money comes from manufacturers and suppliers who pay a fee annually of thousands to be included on the market. They also make additional payments for their products when they are purchased. For customers this service is easy and quick. You must place your order by the midnight deadline (East Coast time) then Material Bank will get you all of the samples by 10:45 a.m. The next day due to the warehouse at Olive Branch, Mississippi, close to FedEx’s Memphis sorting facility, and a number of robots
“We thought we’d go to Memphis to outsource logistics but couldn’t locate an organization that could do the task,” Sandow says. “They believed we were off the mark.” They told us, “You want to build half one million SKUs in an office. You can place an order at the middle of the night, and then get the item onto an aircraft at 2. a.m. Do you have a thought? We replied, “We’ll use an old vacant location for construction in Memphis and then work out the specifics.”
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