Last year, when Material Bank announced a $100 million fundraise, Business of Home referred to the number as “staggering.” Prepare to be staggered once again. The sampling platform founded by Adam Sandow has just announced another raise, this time for $175 million. The round, first reported by Bloomberg, was led by Canadian investment giant Brookfield. It pegs Material Bank’s value at $1.9 billion, making it that rarest of beasts: a unicorn startup.
How can Material Bank spend $175 million? In an interview with BOH, Sandow ticked off a dizzying variety of initiatives the company is pursuing at full tilt: a new version of its software to debut later this year; expansion into Europe and Japan; digitization of its brands’ catalogs of materials; more acquisitions following its purchase of Amber Engine and Clippings; the expansion of its paint-only sampling business Samplize; a consumer-oriented version of the platform; and a push into the residential design side of the industry.
Big picture, the main two categories of expenditure are research and development and hiring, says Sandow, who suggested that Material Bank is looking to add “a few hundred” employees in the coming year alone. “We’re always thinking, How do we augment Material Bank with additional tools on the platform that will really be as impactful for designers? Things that will help them be more creative, better at their jobs and save them more time,” he says. “We’re working on a lot of new tools, so a big part of the investment is investing in people and innovation.”
Interestingly, while Material Bank is certainly in growth mode, Sandow says the company still has plenty of cash left over from its last nine-figure raise. Bringing more capital into the business is at least partially a hedge against what looks to be choppy waters for the economy ahead. “Going into whatever the world throws at us economically, to have a very strong balance sheet is going to be essential,” he says. “We want to make sure we have the power to help our brands.”
Material Bank’s facility Courtesy of Material Bank
This raise—which also includes contributions from Fifth Wall, Soft Bank Vision Fund 2, and RXR—brings Material Bank’s total funding to more than $325 million. (By comparison, 1stdibs, one of the most well-funded businesses in the industry, raised $253 million in its four rounds before going public.) What do investors see in Sandow’s creation that makes them keep wanting to open up their checkbooks?
Material Bank, like many startups, is not profitable. However, its core business—the packaging and delivery of samples—generates plenty of cash. In most cases, brands pay both to be listed on the platform, and a per-shipment cost when their material ends up being sent to a designer. Currently, Material Bank has roughly 500 brand partners—but if the…
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