Fueling the current trend of digitizing the home-remodeling experience, Houzz has raised an impressive $165 million in a fourth round of capital, led by Sequoia Capital, one of its early backers.
Houzz is using its pile of cash and its popularity with home remodelers to fuel a foray into e-commerce. In a new section of its site called Houzz Marketplace, the company will play host to a selection of bathtubs, vanities, backsplashes and other home décor items being sold by thousands of online retailers.
The transactions will all take place on the Houzz site, and the company will keep a 15% cut of each sale. The order fulfillment and customer service will be handled by the sellers.
E-commerce will become the third source of revenue for five-year-old Houzz, which also sells advertisements and charges architects, designers and other home contractors an annual subscription fee for tools to help them engage with potential customers on its site.
Selling actual products on its site is what Houzz says will make it stand apart from Pinterest, another popular destination for design enthusiasts. I tend to prefer Pinterest over Houzz for collecting pictures and taking a mental break. While I’m interested in seeing the new site design that Houzz has rolled out, I doubt that having products constantly pitched to me is going to be appealing.
I can see how his might appeal to the D-I-Yer more than the Design Professional – especially those who protect ability to source unique finds for their clients.
How do you like the new Marketplace?