Mumbai-headquartered custom manufacturing platform Karkhana.io has raised $6.3 million (Rs 52 crore) in Series A fund led by Arkam Ventures and Susquehanna Asia Venture Capital. The round also saw participation from existing investors Vertex Ventures Southeast Asia and India.
The new funding will be deployed to fuel the expansion of its supplier base, strengthen the electronics supply chain, and drive scaling efforts in the US and Europe.
The company says India’s manufacturing sector is expected to be worth $1 trillion by 2025-26, and contributions from MSMEs will be pivotal in achieving this lofty goal. Factors such as competitive pricing, extensive labour pools, rising domestic demand and geopolitical considerations such as China plus one strategy place India as a manufacturing destination for the world. If equipped with the right resources, India’s 63 million-strong MSME ecosystem has the potential to become an integral part of the manufacturing supply chain for global businesses across electronics, aerospace, clean energy, and auto parts.
Karkhana.io states its tech-enabled platform is well poised to provide sourcing and contract manufacturing solutions to OEMs and tech companies, through its manufacturing MSMEs network in India. The firm works with OEMs across product categories like EVs, medical equipment, consumer electronics, aerospace and others, providing them with a custom range of manufacturing solutions from small batch to mass production. The platform currently has a supplier network of over 400 MSMEs enabling more than 90 OEMs for their contract manufacturing requirements. In the next 3 years, the company’s vision is to empower over 3,000 MSME suppliers.
Sonam Motwani, Founder and CEO, Karkhana.io said, “Our investors’ trust underscores our commitment to revolutionise manufacturing through technology, offering flexible and scalable solutions. This funding extends beyond growing our platform; it’s a dedication to fortifying India’s MSME ecosystem. We want to create a significant impact in sectors with expansive growth potential, addressing surging demand and propelling Karkhana.io to redefine the landscape of the Indian manufacturing industry.”
Bala Srinivasa, MD, Arkam Ventures said. “India’s manufacturing MSMEs account for 45% of industrial output and 40% of all exports. While there is a surge in domestic and international demand from OEMs, most small suppliers are poorly equipped to tap into new order flows, market their capabilities and find ways to maximise their capacity utilisation.”
Bhavani Rana, Investment Advisor at Susquehanna Asia Venture Capital, stated, “The COVID-19 pandemic has highlighted the vulnerability of global supply chains and the need for diversification. India is emerging as a viable manufacturing destination leveraging its advantages in value-added precision industries, low-cost skilled labour, and supportive government policies. To capitalise on this, Karkhana.io uses it’s technology-based custom manufacturing platform, which enables it to provide quick, dependable precision-manufacturing solutions that help OEMs or technology companies expand into new markets by enabling export growth, localising imports, and meeting domestic demand increases.”
Kanika Mayar, Partner, Vertex Ventures Southeast Asia and India said, “We remain impressed by Karkhana.io’s capacity to address the evolving needs of equipment manufacturers and brands seeking streamlined and scalable manufacturing solutions.”
Karkhana.io’s digital platform streamlines and simplifies the sourcing process, providing a single dashboard for companies to access a network of vetted suppliers, regardless of their scale, and overcome manufacturing inefficiencies.
