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Lowe's Bets on Porch.com in Race With Home Depot

NEW YORK (TheStreet) -- Home supply retailer Lowe's(LOW - Get Report) continues to lag Home Depot(HD - Get Report) in store count and revenue.

Another advantage for Home Depot is its relationships with contractors. Lowe's gets 25% of its sales from contractors, compared with 35% at Home Depot. News last week, however, that Lowe's has formed a partnership and invested in Porch.com, a Web site that connects customers to contractors, could change the race between Home Depot and Lowe's for business from contractors.

Porch.com's Web site lets users browse home projects and see costs, and also search for contractors and see what projects have recently been completed in nearby neighborhoods. Porch.com has 1.5 million professionals and 90 million projects. Users can view before and after photos of projects.

The Web site lets contractors sign up for projects and post photos of their work and receive endorsements from customers. The professional aspect of the site is free to sign up for, and contractors can pay $35 a month for premium features on the Web site.

Lowe's will bring the service to 139 locations in North Carolina, South Carolina and Washington state, and allow customers to sign contractors through the Porch.com Web site while in store. Lowe's will set up kiosks for Porch.com, and the Porch service is expected to roll out nationwide eventually.

Founded in Seattle in 2012, Porch.com is the latest venture of entrepreneur Matt Ehrlichman, who was also behind Thriva, an online-registration company that was bought by The Active Network for $60 million in 2007.

Lowe's -- whose market cap is less than half that of Home Depot's -- should receive a big boost from its Porch partnership and should be valued at more than half of its rival.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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