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The Latest Hot Marketplace, Material Bank, Raises $100 Million To Source Architectural And Construction Products—With Help From Robots

Adam Sandow has spent the past several decades building up an extensive collection of magazines that include Interior Design, Luxe, and Metropolis. Through that venture, he came up with the idea of a marketplace for construction, design, and architectural materials that would bring technological and search capabilities, as well as ease of use, to the old-fashioned method of handling materials.

Today, his company, Material Bank, is the most recent fast-growing market to receive praise from investors. Material Bank, a New York and Florida-based company, has raised $100 million in venture capital, with a $1 billion value, Sandow told Forbes in an interview via video from the new facility of the company situated in Olive Branch, Mississippi. The new investment, backed by General Catalyst, brings Material Bank’s total investment to $157.9 million. 

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The new funds will be used to expand Material Bank’s main business, including acquisitions (two of which are expected to close this year) and the development of brand new products under the Material Bank umbrella that will make the company more accessible to consumers. The company’s revenues grew by a third last year and are projected to reach $50 million in the coming year. “There’s not a hotbed of companies in the space,” Sandow states.

Sandow, 52, was born in the United States and spent the last twenty years growing his eponymous media company, which included the launch of Luxe by himself in 2005 and the purchase of Interior Design from Reed Elsevier in 2010. “I love design,” Sandow says. “When I was a kid, I grew up reading design magazines.” However, after a lengthy career in the media industry, he became interested in trying something new. Although he remains the sole owner of all of Sandow’s media operations, he has stepped back from the day-to-day operations.

In the year 2018, he founded Material Bank with the idea of helping architects and designers get the materials they require. In the past, architects and designers were required to ask for carpet swatches, tiles, and sample wallcoverings from the manufacturers. There was no simple method of tracking those samples or keeping them up-to-date. Delays in samples could lead to delays in projects—often with a huge cost and frustration.

A material bank, by contrast, is a collection of material from different vendors, offering clients the capacity to locate the exact product they require in a matter of minutes.

When Sandow first began to talk about the idea in a series of test conversations with designers and brands, they liked it. He adds that he didn’t think anyone could manage tens or thousands of SKUs. “These brands would say, ‘We can barely do it on our own’—how are you going to aggregate a thousand of us?”

“We thought we’d head to Memphis to outsource our logistics, but we were unable to locate a company that could complete the task.

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The answer, naturally, was technology and an enormous database that contains nearly 100 million points of data that allows users to search and find exactly what they need. Today, over 400 manufacturers like Sherwin-Williams (paints) as well as Mohawk (carpets) have listed their products on the website, while more than 60,000 architects, designers, hotels, as well as fast-food chains have signed up as users. Sandow used a secret advantage he created himself to attract these customers: his own design magazines. “The media side of the business has given us an unfair advantage for sure,” Sandow declares.

The revenue comes from suppliers and manufacturers paying a monthly fee of thousands of dollars to be listed on the market, and also paying additional charges when their products are purchased. For consumers who want to use the service, it is fast and free. You must place your order before the midnight deadline (East Coast Time) as well. The Material Bank will get you the samples together before 10:45 a.m. The next day, thanks to its warehouse located in Olive Branch, Mississippi, close to FedEx’s Memphis sorting center, as well as with the help of our robots.

“We thought we’d go to Memphis and outsource logistics, and we couldn’t find a company to do it,” Sandow states. They believed we were out of the loop. They asked, “Do you want to build half a million SKUs within the building, and then place an order by midnight, and then put the item on an aeroplane by 2 a.m.

The initial Memphis facility was initially a smaller testing facility, but as Material Bank expanded, it was moved across state lines to a bigger, brand new facility. The warehouse is 400,000 square feet. Workers assist robots with bright yellow spines bearing the company’s logo as they pull items from seemingly endless shelves and load them onto the robots, which then transport items to the next stage until an order is completed. “We handle tens of thousands of items going out to the industry on any given night,” Sandow says. “We couldn’t do it without robots.”

The robots are from the company Locus Robotics, a top warehouse robotics company that just achieved a valuation that was a unicorn thanks to an increase in sales from e-commerce. Material Bank was an early client of Locus mobile robots that are autonomous that it refers to as “LocusBots,” in 2018 after it purchased 10 of them for trial. Today, 150 of them are working at the facility, and Sandow anticipates adding another 50 soon. Both businesses have grown at a rapid pace, Sandow notes. “We’ve seen very similar paths to growth. We raised funds, and they increased,” the CEO says. “It feels like we have been paralleling in valuations and capital raising.”

Although Material Bank employs fewer people than it would otherwise because of the robots, Sandow offers workers a base salary of $17.50 an hour, which is well higher than the federal government’s $7.25-an-hour minimum wage. It also pays more than what Sandow says is generally an hourly wage for a warehouse worker. Around 200 people work at the site that opened earlier this year.

“The logistics here are extraordinarily complicated,” he declares. “That’s how we’ve been able to scale.”

Read also; https://guidelinenews.com/qa-joanna-onezero-a-queer-femme-of-color/

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