Ben Preston knew Gearflow was special when the site broke down.
“We were rebuilding the site, and we just realized there’s all this opportunity in front of us,” Preston told Built In. “We’re just waiting for the tech to catch up.”
The wait to supercharge the Gearflow site just got a little shorter. On Thursday, the Chicago startup won $162,000 from Northwestern University’s annual VentureCat pitch contest, which is sponsored by The Levy Institute and alumni Lanny and Sharon Martin. Gearflow, an online marketplace for construction equipment, won three categories at this year’s contest, including audience favorite and grand prize. The six-person company will use the funds to hire another engineer to rebuild the site for the third time.
“We’ve come a long way from just Luke and I eating ramen noodles for a full year,” said Preston, who is on track to finish his MBA at NU’s Kellogg School of Management come December.
Preston and his landlord, Luke Powers, launched the marketplace in 2018. After working at his father-in-law’s equipment rental company for six years, Powers was tasked with bringing the family business online. When he began his research, he learned how fragmented the parts industry was and how expensive it could be to build a site from scratch. Eighty percent of equipment suppliers are independent, small shops, Preston said, and most do not have the budget to construct their own e-commerce sites. Instead, these mom-and-pop shops rely on selling through Amazon or eBay. These generic marketplaces lack branded storefronts for suppliers and group all sellers in the same place.
“So it becomes really commoditized by price because you’re selling next to everyone,” Preston said, since a farmer selling old tractor parts could be listed next to a supplier whose core business is selling construction items.
Unlike these competitors, Gearflow allows suppliers to create their own online store pages, building on the sales reputation they’ve developed for years offline. In its first year in business, suppliers’ overwhelming demand to get listed crashed the site. Gearflow raised $1.8 million in seed funding at the end of last year to rebuild. Now, the VentureCat cash will help the company expand even more.
Gearflow now lists — or is waiting to list — 12 million SKUs from 108 suppliers located across the country. Preston said the fresh funds will go toward re-platforming and getting all the items listed. By the beginning of next year, the company aims to offer a space for equipment rental companies like Powers’ family’s to list. Eventually, Gearflow hopes to analyze its transactions and use the insights found to inform suppliers’ decisions around fleet, equipment, marketing and more.
“There’s some inherent mistrust sometimes with tech companies coming into the construction industry, thinking that they can solve all the problems,” Preston said. “We have relationships in the industry. You can’t build tech to replace that.”