Why This Matters to Distributors: Builders FirstSource is extending its digital strategy deeper into its customers’ operations, with plans to connect product data and purchasing with AI tools used for estimating, construction and project management. The five-year Digs agreement could give the distributor a larger role in how builders specify and buy materials.
Builders FirstSource is leading a $25.3 million funding round for construction technology company Digs and has signed a five-year commercial agreement to integrate the company’s artificial intelligence technology into its digital platform.
The companies announced the agreement on Aug. 25. Builders FirstSource is the sole lead on Digs’ $25.3 million Series A financing. The companies did not disclose the amount Builders FirstSource is investing in, its ownership stake or other investors participating in the round.
The deal gives Builders FirstSource another way to move beyond supplying building materials and further into the technology its customers use to estimate projects, purchase materials, and manage construction.
Builders FirstSource and Digs plan to integrate Digs’ AI technology with the distributor’s existing digital systems. The companies said technology will connect plans, specifications, product selections, approvals, warranties, communications, and project histories on a single platform.
The planned workflows will extend across estimating, procurement and construction, as well as warranty and homeowner services after construction is completed.
Builders FirstSource CEO Peter Jackson said customers are looking for technology that can reduce manual work and improve productivity.
“Our customers are looking for seamless technology that helps them operate more efficiently and deliver a better homeowner experience,” Jackson said.
The procurement component is particularly significant for Builders FirstSource, one of the country’s largest building materials distributors.
The Irving, Texas-based company has approximately 565 distribution and manufacturing locations in 43 states and serves more than 140,000 customers. Its product portfolio includes lumber, sheet goods, windows, doors, millwork, and specialty building products. It also manufactures roof and floor trusses, wall panels and other components and provides installation, turnkey framing, and shell construction services in some markets.
Under the Digs agreement, builders could eventually work from common project information across estimating, purchasing, construction, design, sales, and homeowner service.
Planned capabilities include AI chat, electronic signatures, QR codes, project collaboration and AI-assisted diagramming and product selections. The companies also plan tools for homeowner handoffs, warranties, and post-construction service.
The companies did not disclose when the new capabilities will become available, how they will be priced or whether they will be offered to all Builders FirstSource customers.
The agreement comes as Builders FirstSource continues investing in technology while contending with weaker residential construction demand.
Second-quarter sales declined 8.8% to $3.9 billion, primarily because of lower housing starts, weaker organic sales and lower commodity prices. The company reported a net loss of $3.9 million for the quarter, compared with net income in the year-earlier period. Builders FirstSource also reported about $28 million in quarterly productivity savings from operational and supply-chain initiatives.
The Digs partnership builds on Builders FirstSource’s broader effort to combine materials distribution, manufacturing, design, and digital services.
Digs uses AI to organize construction documents and related project information. The company serves builders, contractors, designers, trade partners, vendors, and homeowners across all 50 states.
Digs CEO and co-founder Ryan Fink said the companies intend to create a digital record of a home that remains useful after construction is completed.
“Builders FirstSource brings national reach, industry relationships, product data, and market scale,” Fink said.
For Builders FirstSource, the agreement potentially puts its product data and digital services closer to the point where builders make purchasing decisions. But the companies have not yet disclosed how product recommendations or procurement will work within the Digs platform, whether Builders FirstSource products will be directly purchasable through it or what adoption they expect among the distributor’s customers.
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