The building materials market is fragmented, according to: Global Fair CEO Shaily Garg, as it involves layers of both supply chain and logistics complexity. In a 2021 questionnaire for the National Association of Home Builders and Wells Fargo, the vast majority of builders said the time it takes to obtain materials — and the cost of materials — remain the top issues they face.
Garg argues that technology can help, which is why she launched GlobalFair in 2020 with Ashish Chandra. GlobalFair, a business-to-business startup, aims to simplify the sourcing of “turnkey” materials such as countertops, quartz countertops, cabinets, natural stone and tiles with a digital marketplace for U.S. construction contractors.
GlobalFair announced today that it has raised $20 million in a Series A financing round led by Lightspeed – a mix of equity ($12 million) and debt ($8 million) – with participation from Saama Capital, India Quotient, AUM Ventures and Stride Ventures. It brings the company’s total amount raised to $22 million after a $2 million starting round last February.
“The idea of GlobalFair was something Chandra and I felt strongly about given the fragmented nature of construction companies,” Garg said. “Across the globe, global supply chain challenges are leading to construction delays and labor shortages.”
Garg says she was interested in construction from a young age. Her family owned a quartz manufacturing company and she trained as an engineer before joining P&G before founding GlobalFair after stints with PwC and TransUnion. Chandra is also an engineer with a background in infrastructure consulting. She worked as a director at PwC India and co-founded TrueCover, a startup that makes blockchain-based insurance tools.
With GlobalFair, Garg and Chandra leveraged their engineering background to create a platform with predictive modeling capabilities. While the platform’s flagship product is a marketplace that connects contractors, distributors, manufacturers, architects, and construction companies to source materials, GlobalFair also provides a tool to automate building materials estimations based on architectural plans and construction drawings. In addition, the company hosts a materials visualization app to help architects and designers anticipate what things might look like once installed, as well as an automated enterprise resource planning system to — in Garg’s work — “prompt response time for customers and suppliers.” in multiple geographic areas.”
“[W]We have created an end-to-end synchronized supply chain from discovery to the final delivery of materials to the customer,” said Garg. “Our one-stop-shop platform is transformative for supply-side manufacturing, opening the production pockets in India, Vietnam and other Southeast Asian countries to global markets. We strive to be the largest technology-first global supplier of building materials by providing an easy, cost-effective and seamless cross-border procurement experience to construction contractors.”
To this end, GlobalFair claims to work with “hundreds” of contractors and retail clients in the US, particularly for multifamily and hospitality projects with budgets ranging from $100 million to $500 million. Garg says GlobalFair’s customer base ranges from major manufacturers and local distributors to exporters and chain stores that buy from distributors.
Garg attributes the company’s recent success in part to the pandemic and the ensuing chaos in the supply chain. A report of Buildertrend found that the average number of days of delays more than doubled in 2022 compared to last year – due to volatile material costs, shipping delays and scarce labor.
Construction startups have broadly benefited from tailwinds over the past two years. In H1 2022 alone, funding in the sector was $1.3 billion, according to to Pitchbook — up 44% from H2 2021.
“COVID-19 has had a seismic impact on global manufacturing networks, fundamentally changing logistics costs and existing supply chains,” Garg said. “Companies today are more concerned about the resilience of their supply chains and are therefore looking to expand their supplier networks… At GlobalFair, we unbundle the long cross-border supply chain and connect contractors directly with the suppliers.”
Garg claims GlobalFair maintains “unit profitability” despite the current economic uncertainty, given the “strong customer pull and growth” between the starting and Series A rounds. The new capital will be used to expand the company’s team (from about 100 people to more than 200 by mid-2023), build products and scale GlobalFair’s technology offerings into new markets, she said.
Lightspeed partner Bejul Somaia shared via email: “The pandemic caused stress in supply chains across industries, increasing the need for transparency, visibility and geographic diversification in global procurement of construction products and materials. By using technology to bring together a network of manufacturing facilities in India and Southeast Asia, GlobalFair enables buyers in any country to discover new offerings in an efficient, transparent and secure electronic marketplace.”