Tiger leads US$142-million investment in Montreal delivery company RenoRun looking to take the Y out of DIY for general contractors – The Globe and Mail
Eamonn O’Rourke and Joelle Chartrand, co-founders of RenoRun Inc.Christinne Muschi/The Globe and Mail
RenoRun Inc., a fast-growing Montreal startup building an Instacart-like service to deliver construction materials to general contractors, has raised US$142-million in a private-capital financing led by global hedge fund giant Tiger Global Management.
The deal, finalized last fall but unveiled on Tuesday, was one of several investments in Canada by New York-based Tiger in 2021, before technology stocks began selling off, which observers fear could spread to private technology valuations. The financing includes more than US$100-million in equity issued by RenoRun plus other funding instruments including debt.
Other investors include U.S. venture capital firms Sozo Ventures, Fifth Wall, and Triple Point Capital, as well as digital-automation company Schneider Electric. Canadian wealth manager Nicola Wealth, Investissement Québec, BDC Capital and Export Development Canada are also involved in the financing.
Past backers also participating include ScaleUP Ventures, Obvious Ventures, Inovia Capital, Real Ventures, Maple VC and Silicon Valley Bank. “This is one of the fastest-growing revenue companies I’ve ever worked with,” said ScaleUP partner Matt Roberts.
RenoRun generates more than US$30-million in annual revenue and has served more than 15,000 contractors since launching in 2017. Chief executive officer Eamonn O’Rourke said he expects that to hit US$100-million this year as RenoRun expands from serving five North American cities (Toronto, Montreal, Boston, Philadelphia, Chicago) to 10, and movesto nearly double staff to 1,000 people.
Phil Wickham, general partner of Silicon Valley-based Sozo, said “we’re making a bet at this stage, which is still very early, that this team can make the right decisions” and rapidly grow. “If they do, this company becomes super interesting.”
RenoRun was founded in 2016 by Mr. O’Rourke, spouse Joelle Chartrand and her brother Devlin (who has since left) after the couple took a break in California the prior year from running several construction companies together in Ireland, Australia and Canada. They also have three kids under 10. “Successfully juggling family and business roles takes a lot of self-awareness and dedication” Ms. Chartrand, vice-president of culture, said in an e-mail.)
When Mr. O’Rourke saw how Instacart’s on-demand grocery delivery service worked, he thought the same model could work well for general contractors, delivering everything from screws to two-by-fours. He explained that on any job site, one worker typically visits a hardware store several times a week for materials. With workers earning C$25 to C$65 an hour, those trips are expensive and hurt productivity.
His idea was to develop a service where contractors could order materials online for delivery within a narrow time window. RenoRun charged $50 an hour, the same as wages for on-site workers to make store trips themselves and cheaper than merchants charged for deliveries.
RenoRun started in Montreal in 2017, with Mr. O’Rourke and team walking onto job sites offering free coffee and a sales pitch. “The beauty of this business is that on any residential street in almost any North American city you can see a potential client,” he said. At first the team encountered skepticism, but as he walked contractors through the math on savings “it became a very easy sell,” he said.
Demand quickly grew and RenoRun expanded to Toronto and the United States, testing the Austin, Tex., market in 2019 before leaving to focus on closer, larger cities such as Boston. “I miss them,” said Travis Smith, owner of Austin-based Hammersmith Construction and Remodeling, which used RenoRun daily during its brief time in the market. “I’d use them again” if they returned, he said. “There’s nothing like them. It saved time and money.”
Scaling up is a huge effort. RenoRun is a vertically integrated e-commerce merchant; it oversees it own logistics with branded vans and uniformed drivers and technology to handle ordering, route optimization and invoicing. It operates a vast warehouse in each market, which it stocks with nearly 20,000 items from an array of suppliers including Home Depot and Lowes. RenoRun faces local delivery rivals, including TOOLBX Inc. in Toronto, and has a 97 per cent on-time delivery rate, higher than industry standards, Mr. O’Rourke said. Gross margins are between 25 per cent and 38 per cent of revenue like others in the business, Mr. O’Rourke said.
Sozo’s Mr. Wickham said “when we first saw RenoRun we didn’t love it” as an opportunity. But he warmed to the team and was impressed by their ability to execute on plans. After expecting an indifferent response from “small, grumpy contractors” he was “bewildered” by the opposite reaction during reference checks. “We couldn’t get them off the phone. They couldn’t stop talking about this company,” Mr. Wickham said. “”We concluded the margins can be more attractive” as RenoRun grows.
Will Gonell, principal of Toronto home builder Gonell Homes, said using RenoRun has been a “no-brainer” for him. “They delivered on their promises and made life easier for us.” RenoRun now delivers a full job’s worth of materials based on blueprint plans and offers a “pro membership” service for $200 a month, giving contractors free delivery, pickups, returns and discounts on materials. Not using RenoRun, Mr. Gonell said, “would be like going back to not using a cellphone.”
RenoRun intends to increase its stock to 100,000 items per market. Whether it plans to cut out giant retailers completely from the supplier mix and buy more from wholesalers is a topic Mr. O’Rourke was reluctant to address. Mr. Wickham said RenoRun was more focused on the “all-encompassing” task of scaling up. “If they get that right they’ll figure out a way to deal with some of the other ecosystem players,” Mr. Wickham said.
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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
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