Materials Market, the innovative online marketplace for heavy side building materials, has raised £2 million in a funding round led by its existing backers Fuel Ventures, with participation from new investors Active Partners (whose investments include household names like Soho House and Honest Burgers) and an assortment of experienced angel investors.

In addition to the new funding, Materials Market also welcomed two new directors to the board: James Mackenzie (ex MD of Travis Perkins & Toolstation with extensive experience in the digital building materials space) and Thomas Studd (former partner at Vitruvian whose portfolio experience includes two-sided marketplaces such as AnyVan, Carwow and Lalamove).

The UK’s £40bn building materials market is hugely fragmented, comprising thousands of suppliers servicing localised areas with constantly fluctuating stock and delivery capabilities. For buyers of building materials, the purchase process involves contacting numerous suppliers to negotiate prices and discuss stock availability and delivery options.

With limited digital adoption amongst suppliers, the process remains highly analogue, creating significant friction and frustration, as well as fostering an opaque pricing environment. Against the current macroeconomic backdrop of price inflation and the government’s push to build 1.5 million homes before the end of this term, the opportunity to disrupt the market with a digital-first offering is vast.

Founded by professional construction buyers Samuel Hunt and Andrew Haehn, who experienced these problems first-hand, Materials Market is on a mission to create a perfect online market for the buying and selling of building materials. Leveraging its proprietary marketplace technology and working with a huge network of supplier partners across the country, Materials Market offers low prices, speedy delivery and great service levels to DIY and trade customers.

As well as providing customers with fairer pricing than they would get from well-known retailers, Materials Market gives its suppliers access to an online market without the need to invest in expensive digital infrastructure.

Since 2020, Materials Market has grown from a spare bedroom startup to the leading marketplace of its kind in the UK. The number of suppliers actively engaged on the platform has reached over 750 branches, more than any other UK building materials supplier (online or offline). This supply chain is now supporting an ecosystem of over 2,000 monthly customers, ranging from DIY enthusiasts looking for a better deal than those offered by general retailers, to construction contractors working on large commercial projects.

The latest investment will be used primarily to recruit best-in-class talent, including across its supplier and sales teams, marketing, product and operations, helping Materials Market to further push the boundaries of its marketplace model and unlock new and innovative ways to connect customers and suppliers.

Talking about the deal from their Shoreditch offices, Co-Founder and CEO Samuel Hunt said: “The fragmented nature of the construction industry creates a frustrating trading environment for both customers and suppliers alike. Faced with an uncertain economic climate and the ambitious targets set by government, it’s never been more important to maximise efficiency in the procurement process. We are thrilled to be working with Active Partners, who bring a wealth of experience from the consumer side, as well as Tom and James, whose expertise will play a pivotal role as we take this exciting next step in our journey.”

Tom Profumo, Partner at Active Partners, added: “The building materials market is highly fragmented and inefficient and has yet to experience the level of disruption seen in other industries through digitisation. Materials Market is changing that with its innovative approach and proprietary technology, seamlessly connecting buyers and suppliers through its online marketplace. Their impressive growth to date demonstrates clear product market fit and Samuel and Andrew’s deep understanding of their customers. We’re excited to support them as they scale their offering nationwide and beyond.”

James Mackenzie, newly appointed Non-Executive Director at Materials Market, said: “The building  materials sector is one of the last major industries to undergo true digital transformation. What Materials Market is doing — using technology to simplify and scale a highly fragmented supply chain — is exactly what the industry needs. Their progress to date speaks volumes, and I’m looking forward to bringing my experience to the board as we work to unlock the next phase of growth.”