Personal blog of Yzmir Ramirez

The manufacturing industry took a hard hit from the Covid-19 pandemic, but there are signs of how it is slowly starting to come back into shape — helped in part by new efforts to make factories more responsive to the fluctuations in demand that come with the ups and downs of grappling with the shifting economy, virus outbreaks and more. Today, a businesses that is positioning itself as part of that new guard of flexible custom manufacturing — a startup called Fractory — is announcing a Series A of $9 million (€7.7 million) that underscores the trend.

The funding is being led by OTB Ventures, a leading European investor focussed on early growth, post-product, high-tech start-ups, with existing investors Trind Ventures, Superhero Capital, United Angels VC, Startup Wise Guys and Verve Ventures also participating.

Founded in Estonia but now based in Manchester, England — historically a strong hub for manufacturing in the country, and close to Fractory’s customers — Fractory has built a platform to make it easier for those that need to get custom metalwork to upload and order it, and for factories to pick up new customers and jobs based on those requests.

Fractory’s Series A will be used to continue expanding its technology, and to bring more partners into its ecosystem.

To date, the company has worked with more than 24,000 customers and hundreds of manufacturers and metal companies, and altogether it has helped crank out more than 2.5 million metal parts.

To be clear, Fractory isn’t a manufacturer itself, nor does it have no plans to get involved in that part of the process. Rather, it is in the business of enterprise software, with a marketplace for those who are able to carry out manufacturing jobs — currently in the area of metalwork — to engage with companies that need metal parts made for them, using intelligent tools to identify what needs to be made and connecting that potential job to the specialist manufacturers that can make it.

The challenge that Fractory is solving is not unlike that faced in a lot of industries that have variable supply and demand, a lot of fragmentation, and generally an inefficient way of sourcing work.

As Martin Vares, Fractory’s founder and MD, described it to me, companies who need metal parts made might have one factory they regularly work with. But if there are any circumstances that might mean that this factory cannot carry out a job, then the customer needs to shop around and find others to do it instead. This can be a time-consuming, and costly process.

“It’s a very fragmented market and there are so many ways to manufacture products, and the connection between those two is complicated,” he said. “In the past, if you wanted to outsource something, it would mean multiple emails to multiple places. But you can’t go to 30 different suppliers like that individually. We make it into a one-stop shop.”

On the other side, factories are always looking for better ways to fill out their roster of work so there is little downtime — factories want to avoid having people paid to work with no work coming in, or machinery that is not being used.

“The average uptime capacity is 50%,” Vares said of the metalwork plants on Fractory’s platform (and in the industry in general). “We have a lot more machines out there than are being used. We really want to solve the issue of leftover capacity and make the market function better and reduce waste. We want to make their factories more efficient and thus sustainable.”

The Fractory approach involves customers — today those customers are typically in construction, or other heavy machinery industries like ship building, aerospace and automotive — uploading CAD files specifying what they need made. These then get sent out to a network of manufacturers to bid for and take on as jobs — a little like a freelance marketplace, but for manufacturing jobs. About 30% of those jobs are then fully automated, while the other 70% might include some involvement from Fractory to help advise customers on their approach, including in the quoting of the work, manufacturing, delivery and more. The plan is to build in more technology to improve the proportion that can be automated, Vares said. That would include further investment in RPA, but also computer vision to better understand what a customer is looking to do, and how best to execute it.

Currently Fractory’s platform can help fill orders for laser cutting and metal folding services, including work like CNC machining, and it’s next looking at industrial additive 3D printing. It will also be looking at other materials like stonework and chip making.

Manufacturing is one of those industries that has in some ways been very slow to modernize, which in a way is not a huge surprise: equipment is heavy and expensive, and generally the maxim of “if it ain’t broke, don’t fix it” applies in this world. That’s why companies that are building more intelligent software to at least run that legacy equipment more efficiently are finding some footing. Xometry, a bigger company out of the U.S. that also has built a bridge between manufacturers and companies that need things custom made, went public earlier this year and now has a market cap of over $3 billion. Others in the same space include Hubs (which is now part of Protolabs) and Qimtek, among others.

One selling point that Fractory has been pushing is that it generally aims to keep manufacturing local to the customer to reduce the logistics component of the work to reduce carbon emissions, although as the company grows it will be interesting to see how and if it adheres to that commitment.

In the meantime, investors believe that Fractory’s approach and fast growth are strong signs that it’s here to stay and make an impact in the industry.

“Fractory has created an enterprise software platform like no other in the manufacturing setting. Its rapid customer adoption is clear demonstrable feedback of the value that Fractory brings to manufacturing supply chains with technology to automate and digitise an ecosystem poised for innovation,” said Marcin Hejka in a statement. “We have invested in a great product and a talented group of software engineers, committed to developing a product and continuing with their formidable track record of rapid international growth

Long before COVID-19 precipitated “digital transformation” across the world of work, customer services and support was built to run online and virtually. Yet it too is undergoing an evolution supercharged by technology.

Today, a startup called SightCall, which has built an augmented reality platform to help field service teams, the companies they work for, and their customers carry out technical and mechanical maintenance or repairs more effectively, is announcing $42 million in funding, money that it plans to use to invest in its tech stack with more artificial intelligence tools and expanding its client base.

The core of its service, explained CEO and co-founder Thomas Cottereau, is AR technology (which comes embedded in their apps or the service apps its customers use, with integrations into other standard software used in customer service environments including Microsoft, SAP, Salesforce and ServiceNow). The augmented reality experience overlays additional information, pointers and other tools over the video stream.

This is used by, say, field service engineers coordinating with central offices when servicing equipment; or by manufacturers to provide better assistance to customers in emergencies or situations where something is not working but might be repaired quicker by the customers themselves rather than engineers that have to be called out; or indeed by call centers, aided by AI, to diagnose whatever the problem might be. It’s a big leap ahead for scenarios that previously relied on work orders, hastily drawn diagrams, instruction manuals and voice-based descriptions to progress the work in question.

“We like to say that we break the barriers that exist between a field service organization and its customer,” Cottereau said.

The tech, meanwhile, is unique to SightCall, built over years and designed to be used by way of a basic smartphone, and over even a basic mobile network — essential in cases where reception is bad or the locations are remote. (More on how it works below.)

Originally founded in Paris, France before relocating to San Francisco, SightCall has already built up a sizable business across a pretty wide range of verticals, including insurance, telecoms, transportation, telehealth, manufacturing, utilities and life sciences/medical devices.

SightCall has some 200 big-name enterprise customers on its books, including the likes of Kraft-Heinz, Allianz, GE Healthcare and Lincoln Motor Company, providing services on a B2B basis as well as for teams that are out in the field working for consumer customers, too. After seeing 100% year-over-year growth in annual recurring revenue in 2019 and 2020, SightCall’s CEO says it’s looking like it will hit that rate this year as well, with a goal of $100 million in annual recurring revenue.

The funding is being led by InfraVia, a European private equity firm, with Bpifrance also participating. The valuation of this round is not being disclosed, but I should point out that an investor told me that PitchBook’s estimate of $122 million post-money is not accurate (we’re still digging on this and will update as and when we learn more).

For some further context on this investment, InfraVia invests in a number of industrial businesses, alongside investments in tech companies building services related to them such as recent investments in Jobandtalent, so this is in part a strategic investment. SightCall has raised $67 million to date.

There has been an interesting wave of startups emerging in recent years building out the tech stack used by people working in the front lines and in the field, a shift after years of knowledge workers getting most of the attention from startups building a new generation of apps.

Workiz and Jobber are building platforms for small business tradespeople to book jobs and manage them once they’re on the books; BigChange helps manage bigger fleets; and Hover has built a platform for builders to be able to assess and estimate costs for work by using AI to analyze images captured by their or their would-be customers’ smartphone cameras.

And there is Streem, which I discovered is a close enough competitor to SightCall that they’ve acquired AdWords ads based on SightCall searches in Google. Just ahead of the COVID-19 pandemic breaking wide open, General Catalyst-backed Streem was acquired by Frontdoor to help with the latter’s efforts to build out its home services business, another sign of how all of this is leaping ahead.

What’s interesting in part about SightCall and sets it apart is its technology. Co-founded in 2007 by Cottereau and Antoine Vervoort (currently SVP of product and engineering), the two are long-time telecoms industry vets who had both worked on the technical side of building next-generation networks.

SightCall started life as a company called Weemo that built video chat services that could run on WebRTC-based frameworks, which emerged at a time when we were seeing a wider effort to bring more rich media services into mobile web and SMS apps. For consumers and to a large extent businesses, mobile phone apps that work “over the top” (distributed not by your mobile network carrier but the companies that run your phone’s operating system, and thus partly controlled by them) really took the lead and continue to dominate the market for messaging and innovations in messaging.

After a time, Weemo pivoted and renamed itself as SightCall, focusing on packaging the tech that it built into whichever app (native or mobile web) where one of its enterprise customers wanted the tech to live.

The key to how it works comes by way of how SightCall was built, Cottereau explained. The company has spent 10 years building and optimizing a network across data centers close to where its customers are, which interconnects with Tier 1 telecoms carriers and has a lot of latency in the system to ensure uptime. “We work with companies where this connectivity is mission critical,” he said. “The video solution has to work.”

As he describes it, the hybrid system SightCall has built incorporates its own IP that works both with telecoms hardware and software, resulting in a video service that provides 10 different ways for streaming video and a system that automatically chooses the best in a particular environment, based on where you are, so that even if mobile data or broadband reception don’t work, video streaming will. “Telecoms and software are still very separate worlds,” Cottereau said. “They still don’t speak the same language, and so that is part of our secret sauce, a global roaming mechanism.”

The tech that the startup has built to date not only has given it a firm grounding against others who might be looking to build in this space, but has led to strong traction with customers. The next steps will be to continue building out that technology to tap deeper into the automation that is being adopted across the industries that already use SightCall’s technology.

“SightCall pioneered the market for AR-powered visual assistance, and they’re in the best position to drive the digital transformation of remote service,” said Alban Wyniecki, partner at InfraVia Capital Partners, in a statement. “As a global leader, they can now expand their capabilities, making their interactions more intelligent and also bringing more automation to help humans work at their best.”

“SightCall’s $42M Series B marks the largest funding round yet in this sector, and SightCall emerges as the undisputed leader in capital, R&D resources and partnerships with leading technology companies enabling its solutions to be embedded into complex enterprise IT,” added Antoine Izsak of Bpifrance. “Businesses are looking for solutions like SightCall to enable customer-centricity at a greater scale while augmenting technicians with knowledge and expertise that unlocks efficiencies and drives continuous performance and profit.”

Cottereau said that the company has had a number of acquisition offers over the years — not a surprise when you consider the foundational technology it has built for how to architect video networks across different carriers and data centers that work even in the most unreliable of network environments.

“We want to stay independent, though,” he said. “I see a huge market here, and I want us to continue the story and lead it. Plus, I can see a way where we can stay independent and continue to work with everyone.”

Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space, has raised $242 million in Series C funding from Vista Equity Partners.

As part of the financing, Vista Equity is taking a minority stake in the company. The round follows $25 million in financing from CIBC Innovation Banking last September, and brings Vena’s total raised since its 2011 inception to over $363 million.

Vena declined to provide any financial metrics or the valuation at which the new capital was raised, saying only that its “consistent growth and…strong customer retention and satisfaction metrics created real demand” as it considered raising its C round.

The company was originally founded as a B2B provider of planning, budgeting and forecasting software. Over time, it’s evolved into what it describes as a “fully cloud-native, corporate performance management platform” that aims to empower finance, operations and business leaders to “Plan to Grow” their businesses. Its customers hail from a variety of industries, including banking, SaaS, manufacturing, healthcare, insurance and higher education. Among its over 900 customers are the Kansas City Chiefs, Coca-Cola Consolidated, World Vision International and ELF Cosmetics.

Vena CEO Hunter Madeley told TechCrunch the latest raise is “mostly an acceleration story for Vena, rather than charting new paths.”

The company plans to use its new funds to build out and enable its go-to-market efforts as well as invest in its product development roadmap. It’s not really looking to enter new markets, considering it’s seeing what it describes as “tremendous demand” in the markets it currently serves directly and through its partner network.

“While we support customers across the globe, we’ll stay focused on growing our North American, U.K. and European business in the near term,” Madeley said.

Vena says it leverages the “flexibility and familiarity” of an Excel interface within its “secure” Complete Planning platform. That platform, it adds, brings people, processes and systems into a single source solution to help organizations automate and streamline finance-led processes, accelerate complex business processes and “connect the dots between departments and plan with the power of unified data.”            

Early backers JMI Equity and Centana Growth Partners will remain active, partnering with Vista “to help support Vena’s continued momentum,” the company said. As part of the raise, Vista Equity Managing Director Kim Eaton and Marc Teillon, senior managing director and co-head of Vista’s Foundation Fund, will join the company’s board.

“The pandemic has emphasized the need for agile financial planning processes as companies respond to quickly-changing market conditions, and Vena is uniquely positioned to help businesses address the challenges required to scale their processes through this pandemic and beyond,” said Eaton in a written statement. 

Vena currently has more than 450 employees across the U.S., Canada and the U.K., up from 393 last year at this time.

For American importers, finding suppliers these days can be challenging not only due to COVID-19 travel restrictions. The U.S. government’s entity list designations, human-rights-related sanctions, among other trade blacklists targeting Chinese firms have also rattled U.S. supply chains.

One young company called International Compliance Workshop, or ICW, is determined to make sourcing easier for companies around the world as it completed a fresh round of funding. The Hong Kong-based startup has just raised $5.75 million as part of its Series A round, boosting its total funding to around $10 million, co-founder and CEO Garry Lam told TechCrunch.

ICW works like a matchmaker for suppliers and buyers, but unlike existing options like Alibaba’s B2B platform or international trade shows, ICW also vets suppliers over compliance, product quality and accreditation. It gathers all that information into its growing database of over 40,000 suppliers — 80% of which are currently in China — and recommends them to customers based on individual needs.

Founded in 2016, ICW’s current client base includes some of the world’s largest retailers, including Ralph Lauren, Prenatal Retail Group, Blokker, Kmart and a major American pharmacy chain that declined to be named.

ICW’s latest funding round was led by Infinity Ventures Partners with participation from Integrated Capital and existing investors MindWorks Capital and the Hong Kong government’s $2 billion Innovation and Technology Venture Fund.

Supply chain shift

In line with the ongoing shift of sourcing outside China, in part due to the U.S.-China trade war and China’s growing labor costs, ICW has seen more customers diversifying their supply chains. But the transition has limitations in the short run.

“It’s still very difficult to find suppliers of certain product categories, for example, Bluetooth devices and power banks, in other countries,” observed Lam. “But for garment and textile, the transition already began to happen a decade ago.”

In Southeast Asia, which has been replacing a great deal of Chinese manufacturing activity, each country has its slight specialization. Whereas Vietnam abounds with wooden furniture suppliers, Thailand is known for plastic goods and Malaysia is a good source for medical supplies, said Lam.

When it comes to trickier compliance burdens, such as human rights sanctions, ICW relies on third-party certification institutes to screen and verify suppliers.

“There is a [type of] qualification standard that verifies whether a supplier has fulfilled its corporate social responsibility … like whether the factory fulfills the labor law, the minimum labor rights or the payroll, everything,” Lam explained.

ICW plans to use the fresh proceeds to further develop its products, including its compliance management system, product testing platform and B2B-sourcing site.

This has been a long time coming, but the OpenStack Foundation today announced that it is changing its name to “Open Infrastructure Foundation,” starting in 2021.

The announcement, which the foundation made at its virtual developer conference, doesn’t exactly come as a surprise. Over the course of the last few years, the organization started adding new projects that went well beyond the core OpenStack project, and renamed its conference to the “Open Infrastructure Summit.” The organization actually filed for the “Open Infrastructure Foundation” trademark back in April.

Image Credits: OpenStack Foundation

After years of hype, the open-source OpenStack project hit a bit of a wall in 2016, as the market started to consolidate. The project itself, which helps enterprises run their private cloud, found its niche in the telecom space, though, and continues to thrive as one of the world’s most active open-source projects. Indeed, I regularly hear from OpenStack vendors that they are now seeing record sales numbers — despite the lack of hype. With the project being stable, though, the Foundation started casting a wider net and added additional projects like the popular Kata Containers runtime and CI/CD platform Zuul.

“We are officially transitioning and becoming the Open Infrastructure Foundation,” long-term OpenStack Foundation executive president Jonathan Bryce told me. “That is something that I think is an awesome step that’s built on the success that our community has spawned both within projects like OpenStack, but also as a movement […], which is [about] how do you give people choice and control as they build out digital infrastructure? And that is, I think, an awesome mission to have. And that’s what we are recognizing and acknowledging and setting up for another decade of doing that together with our great community.”

In many ways, it’s been more of a surprise that the organization waited as long as it did. As the foundation’s COO Mark Collier told me, the team waited because it wanted to be sure that it did this right.

“We really just wanted to make sure that all the stuff we learned when we were building the OpenStack community and with the community — that started with a simple idea of ‘open source should be part of cloud, for infrastructure.’ That idea has just spawned so much more open source than we could have imagined. Of course, OpenStack itself has gotten bigger and more diverse than we could have imagined,” Collier said.

As part of today’s announcement, the group also announced that its board approved four new members at its Platinum tier, its highest membership level: Ant Group, the Alibaba affiliate behind Alipay, embedded systems specialist Wind River, China’s FiberHome (which was previously a Gold member) and Facebook Connectivity. These companies will join the new foundation in January. To become a Platinum member, companies must contribute $350,000 per year to the foundation and have at least two full-time employees contributing to its projects.

“If you look at those companies that we have as Platinum members, it’s a pretty broad set of organizations,” Bryce noted. “AT&T, the largest carrier in the world. And then you also have a company Ant, who’s the largest payment processor in the world and a massive financial services company overall — over to Ericsson, that does telco, Wind River, that does defense and manufacturing. And I think that speaks to that everybody needs infrastructure. If we build a community — and we successfully structure these communities to write software with a goal of getting all of that software out into production, I think that creates so much value for so many people: for an ecosystem of vendors and for a great group of users and a lot of developers love working in open source because we work with smart people from all over the world.”

The OpenStack Foundation’s existing members are also on board and Bryce and Collier hinted at several new members who will join soon but didn’t quite get everything in place for today’s announcement.

We can probably expect the new foundation to start adding new projects next year, but it’s worth noting that the OpenStack project continues apace. The latest of the project’s bi-annual releases, dubbed “Victoria,” launched last week, with additional Kubernetes integrations, improved support for various accelerators and more. Nothing will really change for the project now that the foundation is changing its name — though it may end up benefitting from a reenergized and more diverse community that will build out projects at its periphery.

When companies need to find manufacturers to build custom parts, it’s not always an easy process, especially during a pandemic. Xometry, a seven-year-old startup based in Maryland, has built an online marketplace where companies can find manufacturers across the world with excess capacity to build whatever they need. Today, the company announced a $75 million Series E investment to keep expanding the platform.

T. Rowe Price Associates led the investment, with participation from new firms Durable Capital Partners LP and ArrowMark Partners. Previous investors also joined the round, including BMW i Ventures, Greenspring Associates, Dell Technologies Capital, Robert Bosch Venture Capital, Foundry Group, Highland Capital Partners and Almaz Capital . Today’s investment brings the total raised to $193 million, according to the company.

Company CEO and co-founder Randy Altschuler says Xometry fills a need by providing a digital way of putting buyers and manufacturers together with a dash of artificial intelligence to put the right combination together. “We’ve created a marketplace using artificial intelligence to power it, and provide an e-commerce experience for buyers of custom manufacturing and for suppliers to deliver that manufacturing,” Altschuler told TechCrunch.

The kind of custom pieces that are facilitated by this platform include mechanical parts for aerospace, defense, automotive, robotics and medical devices — what Altschuler calls mission-critical parts. Being able to put companies together in this fashion is particularly useful during COVID-19 when certain regions might have been shut down.

“COVID has reinforced the need for distributed manufacturing and our platform enables that by empowering these local manufacturers, and because we’re using technology to do it, as COVID has unfolded […] and as continents have shut down, and even specific states in the United States have shut down, our platform has allowed customers to autocorrect and shift work to other locations,” he explained

What’s more, companies could take advantage of the platform to manufacture critical personal protective equipment. “One of the beauties of our platform was when COVID hit customers could come to our platform and suddenly access this tremendous amount of manufacturing capacity to produce this much-needed PPE,” he said.

Xometry makes money by facilitating the sale between the buyer and producer. They help set the price and then make money on the difference between the cost to produce and how much the buyer was willing to pay to have it done.

They have relationships with 5,000 manufacturers located throughout the world and 30,000 customers using the platform to build the parts they need. The company currently has around 350 employees, with plans to use the money to add more to keep enhancing the platform.

Altschuler says from a human perspective, he wants his company to have a diverse workforce because he never wants to see people being discriminated against for whatever reason, but he also says as a company with an international market, having a diverse workforce is also critical to his business. “The more diversity that we have within Xometry, the more we’re able to effectively market to those folks, sell to those folks and understand how they utilize technology. We’re just going to better understand our customer set as we [build a more diverse workforce],” he said.

As a Series E-stage company, Altschuler does not shy away from the IPO question. In fact, he recently brought in new CFO Jim Rallo, who has experience taking a company public. “The market that we operate in is so large, and there’s so many opportunities for us to serve both our customers and our suppliers, and we have to be great for both of them. We need capital to do that, and the public markets can be an efficient way to access that capital and to grow our business, and in the end that’s what we want to do,” he said.

Due to COVID-19, business continuity has been put to the test for many companies in the manufacturing, agriculture, transport, hospitality, energy and retail sectors. Cost reduction is the primary focus of companies in these sectors due to massive losses in revenue caused by this pandemic. The other side of the crisis is, however, significantly different.

Companies in industries such as medical, government and financial services, as well as cloud-native tech startups that are providing essential services, have experienced a considerable increase in their operational demands — leading to rising operational costs. Irrespective of the industry your company belongs to, and whether your company is experiencing reduced or increased operations, cost optimization is a reality for all companies to ensure a sustained existence.

One of the most reliable measures for cost optimization at this stage is to leverage elastic services designed to grow or shrink according to demand, such as cloud and managed services. A modern product with a cloud-native architecture can auto-scale cloud consumption to mitigate lost operational demand. What may not have been obvious to startup leaders is a strategy often employed by incumbent, mature enterprises — achieving cost optimization by leveraging managed services providers (MSPs). MSPs enable organizations to repurpose full-time staff members from impacted operations to more strategic product lines or initiatives.

Why companies need cost optimization in the long run