HomePortfolio.com has developed an Internet portal that aggregates manufacturers, distributors and retailers in the $250 billion home design industry. The Newton, Mass.-based company recently raised $20 million in its second institutional round of venture financing to support the Web site.
“The home design industry is transforming extremely quickly, and we don’t pretend to have all the answers yet,” said Chief Executive Rolly Rouse. “What we do is strip away unnecessary schlepping on the part of the consumer.”
While Rouse concedes that consumers of home design products ultimately need to see an item before it is purchased, he views the Internet as a tool that can pre-screen items and find the nearest retailer location.
“Unlike books, in most cases customers will want to touch and feel a product before they buy it,” he said. “We have to build and roll out an architecture that allows retailers to post information about themselves.”
After raising nearly $5 million from Scripps Ventures and a series of angel investors, HomePortfolio.com recruited Westport, Conn.-based Oak Investment Partners to lead its $20 million round. Scripps Ventures returned for the round at pro rata, and brought in a strategic investment from fellow E.W. Scripps Co. affiliate, Home & Garden Television (HGTV). Other first-time investors include Advent International, Brand Equity Ventures, Labrador Ventures, Camelot Capital and Seavest Private Investments.
No placement agent was used for the deal. To date, HomePortfolio.com has raised more than $24 million in venture financing.
Proceeds from the fund will go into Web site development and cover infrastructure costs and sales and marketing expenses.
“We want to continue the attractive favorable PR we have been receiving and buy a bigger drum to bang,” Rouse said.
HomePortfolio.com will make its database available to HGTV.com and fulfill back-end needs for the site. The company has also retained the services of advertising agency Kirshenbaum Bond & Partners.
Rouse, who has an engineering background, co-founded HomePortfolio in 1998 with former Boston Globe Deputy Manager Editor Tom Ashbrook.
He said the company will likely raise an additional private round in the next year.
“This space is very large, and there has been a tremendous pain to the consumer in trying to select products that work great and integrate seamlessly,” said Scripps Venture Vice President Benjamin Burditt. “HomePortfolio.com is the first company to build a database of products and a consumer tool set that makes sense.”