One of Vancouver's highest-profile tech entrepreneurs, Jeff Booth, has abruptly resigned from BuildDirect.com Technologies Inc., the e-commerce company he co-founded 18 year ago and hoped would become the Amazon of heavy-duty home-improvement supplies.
In a LinkedIn posting about his departure, the 48-year-old Mr. Booth cited an inability to see eye to eye with debt holders who stepped in to finance the company as part of a roughly $30-million (U.S.) infusion earlier this year, after an earlier attempt to raise between $50-million and $100-million in growth equity from Silicon Valley venture capitalists fell well short of expectations. BuildDirect is an online marketplace platform, which matches suppliers and buyers of flooring and other heavy home-improvement goods.
"Trying to pivot from a legacy business model to a new one takes time, and I felt the weight of old expectations holding us down as we tried to sprint forward," Mr. Booth wrote. "In addition, the partners and debt we took on to finance our technology came with certain realities. Their understanding of growth is different; their timelines for return are different; their appetite for risk is different. In the end, I made the decision to take on debt to fuel our company at a pivotal point in its history. It felt like a last resort at the time. Today, that decision has created an unforeseen roadblock in how I lead BuildDirect from this point forward, specifically how to maintain our vision and how to protect the investment of staff, investors and partners who have believed in our company for the better part of 18 years."
He said his departure was effective immediately.
When contacted by The Globe and Mail on Sunday, a downbeat Mr. booth declined to comment, referring instead to his LinkedIn posting, before adding: "We had something special here."
Mr. Booth had built a reputation as a dogged entrepreneur who had overcome repeated setbacks during BuildDirect's history. "We can actually truly create a global platform company here in Canada, and we're building the talent around the team to do so," he told The Globe last month when the company hired Amazon executive Dan Park – who is now replacing him as CEO – as chief operating officer. "That's why I'm excited about this. It would be easier just to fold up tent a lot of times along the way, but that perseverance and finding a way when there wasn't a way, that creativity just to solve the problem differently I think is going to pay massive dividends."
BuildDirect had previously raised more than $100-million, including an $80-million infusion in 2014 to overhaul the company's online platform to embed artificial intelligence technology to help make it easier for suppliers to manage what lines they could sell. The BuildDirect system is underpinned by a supply-chain network featuring warehouses across North America.
The new system hit some kinks in early 2016 as it was overwhelmed with new products added by suppliers but had been largely fixed by earlier this year and the company had recently seen its customer-acquisition costs – which had previously been excessive – drop dramatically. However, sales weren't showing fast enough growth for investors. BuildDirect was forced to cut employees, parting ways with its vice-president of marketing, Joseph Thompson, who joined the company four years ago from Amazon.
The company's most recent financing, which was not disclosed by the company before Mr. Booth's posting, fell short of expectations and valued the company at less than half the $350-million valuation it commanded when BuildDirect last raised money in 2014, sources said. One source said prospective investors felt the company was trying to do too much and would be better served by paring back its focus. Past investors OMERS Ventures and BDC Capital did not participate in the latest financing, and representatives of the two organizations left the board, ceding their seats to debt holders.
In his departure posting, Mr. Booth compared his predicament to well-known entrepreneurs Steve Jobs, Elon Musk, FedEx founder Fred Smith and Amazon's Jeff Bezos, saying they also faced crushing challenges before their convictions paid off.
Mr. Booth's departure follows the demise earlier this year of another Vancouver e-commerce company, Shoes.com Technologies Inc.