Houzz raises $165 million for expansion

Home improvement website to launch e-commerce platform

Houzz, the home décor and improvement website, has raised $165 million to fund an expansion of the site’s capabilities and scope.

According to a report from TechCrunch, the new round of funding was led by Sequioa Capital, which was one of Houzz’s early backers. Other investors in the latest round of funding included New Enterprise Associates, GGV Capital, Kleiner Perkins Caufield & Byers, DST Global, and T. Rowe Price.

TechCrunch reports that the injection of funding will be used to fund the launch of Houzz Marketplace, which will allow the site’s visitors to purchase home improvement items, like bathtubs and vanities, from other online retailers.

The transactions will all take place on the Houzz site, and the company will keep a 15% cut of each sale, Houzz CEO Adi Tatarko told The Wall St. Journal.

The Wall St. Journal also reports that the e-commerce platform will become the third source of revenue for Houzz, which currently sells ads and charges architects, designers and contractors an annual subscription fee for tools to help them engage with potential customers on its site.

From the TechCrunch article:

The service currently features over one million products from a large variety of sellers. As Tatarko told me, many businesses actually came to the company to participate in this — and some of them didn’t even have an online presence before this.

“But most importantly, we did this because our users really wanted this,” she noted. “They wanted to be able to complete everything on Houzz.” This is a marketplace, so while Houzz handles the payment in the background, fulfillment and customer service are handled by the sellers.

The funding will also be used to accelerate the company’s global expansion plans. Also from the TechCrunch article:

Houzz, which launched in 2009, already has already opened offices in Berlin, London and — most recently — Sydney. “Houzz is really meant to be a global platform,” Tatarko told me. More than a third of the company’s now 25 million monthly unique users already come from outside the U.S., she told me.

The company currently has international offices in Berlin, London and Sydney and domestic offices in Orange County and Palo Alto, California.

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