August 13, 2015, 10:16 AM

Green products merchant TreeHouse plans to grow online

A $16 million funding round, led by Container Store co-founder Garrett Boone, helps TreeHouse grow from its store roots.

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TreeHouse Inc., a home improvement merchant specializing in eco-friendly products and services, closed on a $16 million Series D funding round last week that is earmarked for launching e-commerce and expanding its store count. Previous funding rounds were smaller and related to capital, but the latest round is the company’s first aimed at growing the business, says Kane Sutphin, marketing director.

And TreeHouse is growing thanks to existing products and services based in its Austin, Texas, store. The company grew sales 60% from 2013 to 2014, and while Sutphin declined to disclose specific dollars, he did say the company is on track to reach its 30% year-over-year growth target for this year.

The company’s website, TreeHouse.co, lists products and has a shopping cart, but transactions are not yet possible. That will change when the e-commerce technology, largely developed in-house, is ready to coordinate with store-based services, Sutphin says.

Lessons learned from initial forays into e-commerce are helping guide the next phase. “In our first iteration we offered a curated product mix, but many were available cheaper at larger competitors like Home Depot,” he says. “Now we will take our products further by assembling kits and packages for specific needs.” One example is TreeHouse’s Healthy Home Cleaning Kit featuring seven products, such as dish soap and a glass cleaner made from natural ingredients, “so it’s easy to switch to nontoxic products in one swoop,” Sutphin says.

The e-commerce rollout, set for some time in the next 12 months, will enable TreeHouse to blend products and services, such as an in-home energy performance assessment, to give customers as the build, or convert to, an environmentally friendly home.

The latest funding, headed by Garrett Boone, co-founder of The Container Store, No. 320 in the Internet Retailer 2015 Top 500 Guide, will be used for stores in new locations beyond its existing Austin store, which opened in 2011. Boone was an investor prior to the latest round and was named chairman of the board during the Series B round, Sutphin says.

Two new store locations will be announced as soon as leases are signed, Sutphin says.

In its quest to offer products and services that “promote healthful and sustainable spaces, with an emphasis on high performance and design,” TreeHouse has developed a solar power financing program for homeowners. It carries such products as a “smart” thermostat programmable via smartphone, fans, lighting and flooring materials, as well as energy efficient light bulbs and power-source products, plus paints with a low environmental impact.

In addition to developing the technology to coordinate store and online sales and services, the new cash will go toward a “product incubator” service, the company says. The incubator will help new companies that have well-engineered products but not the resources to market their wares, Sutphin says.

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