BuildDirect Closes US$43M In Funding Led by Mohr Davidow Ventures; Exits CCAA Protection
VANCOUVER, BC–(Marketwired – March 26, 2018) – BuildDirect, the first technology platform for the home improvement industry, today announced that, in connection with the successful completion of its financial restructuring, it has raised US$28million of new funds and converted US$15 million of Interim Financing provided during the CCAA proceedings for a total raise of US$43 million led by Mohr Davidow Ventures. Additional new and existing investors that participated in the round include Fidelity Investments Canada ULC, Pelecanus Investments Ltd., Lyra Growth Partners Inc., and Beedie Capital. Effective March 22, 2018, the company’s plan of compromise and arrangement (the “Plan”) was implemented, and the company has emerged from protection under both the Companies’ Creditors Arrangement Act (CCAA) in Canada and Chapter 15 of the U.S. Bankruptcy Code. The company filed for protection on October 31, 2017, less than 5 months ago.
BuildDirect’s creditors voted overwhelmingly in favor of the Plan — 100% of voting secured noteholders and nearly 95% in number of voting unsecured creditors approved the Plan. Pursuant to the Plan, secured creditors agreed to convert US$58 million of debt to equity, with the result that only US$4 million of debt remains at emergence. The successful financial restructuring, together with the equity financing, provides BuildDirect with the necessary capital to fund future growth opportunities.
“In addition to reducing our cost structure and strengthening our balance sheet to support our long-term business objectives, we have a renewed focus on professionals which include contractors, builders and interior designers,” said Dan Park, CEO of BuildDirect. “Today marks a defining moment for BuildDirect and I am confident customers and sellers alike will soon recognize the signs of a newly energized and well capitalized business poised for success.”
BuildDirect’s mission is to make commercial and home improvement projects simple. While the company will continue to service homeowners, professional contractors (Pros) are an integral part of the industry and are currently underserved. Further, homeowners who are increasingly shopping online for better prices, wider selection, and convenience, often rely on contractors for product sourcing. Last year, BuildDirect launched a loyalty program for contractors — BuildDirect Pros — and today, Pro sales account for more than one-third of the Company’s revenue and is growing quickly.
“We are very bullish on the shift towards professional contractors,” said Katherine Barr, General Partner, Mohr Davidow Ventures. “BuildDirect is pursuing a very large market opportunity and we believe that the company’s assets, capabilities, and executive leadership uniquely position the Company to be extremely successful moving forward.”
The Plan was approved by BuildDirect’s creditors on March 12, 2018 and by the Supreme Court of British Columbia pursuant to an order made March 13, 2018 (the “Sanction Order”). By order made March 15, 2018 by the U.S. Bankruptcy Court in Los Angeles, the Sanction Order was recognized and given full force and effect in the United States. The Plan was implemented effective March 22, 2018 after all closing conditions to the Plan were met.
“We have many people to thank as this successful outcome is a result of the steadfast support of our employees, board of directors, investors, sellers, and everyone else involved in the process,” added Park. “With the financial restructuring now behind us, we look forward to continuing to provide high quality home remodeling products from around the world at a great price to our customers.”
BuildDirect’s exclusive financial advisor was Canaccord Genuity Group Inc. Its legal advisors were Fasken in Canada and Perkins Coie LLP in the United States. Its court appointed monitor was PricewaterhouseCoopers Inc.
BuildDirect is the first technology platform for the home improvement industry. The BuildDirect platform includes two core business units:
- BuildDirect Marketplace: An online marketplace that offers Pro Buyers and Homeowners the ability to purchase heavyweight home improvement products direct from Sellers and receive efficient direct-to-home (or jobsite) shipping of those products.
- Gateway Supply Chain: The first anywhere-to-the-home supply chain for heavy and bulky goods that equips manufacturers, distributors and retailers with efficient and cost-effective shipping solutions to move their products from anywhere in the world, to locations across North America.
The platform is powered by proprietary machine learning and predictive analytics that drive robust efficiencies for the innovation of heavyweight product services, distribution, and sales across buyers, sellers, shippers, and everyone in between.
BuildDirect is headquartered in Vancouver, British Columbia with warehouse locations across North America. For more information:
- Shop: BuildDirect.com or search our products online
- Sell: BuildDirect.com/sellers
- Ship: gatewaysupplychain.com
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Katie Kernahan / Madeleine Davidson
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