Karkhana.io raises $6.3M from Arkam and Susquehanna Asia Venture Capital

Business-to-Business (B2B) on-demand manufacturing platform Karkhana.io has raised $6.3 million in its Series A funding round led by Arkam Ventures and Susquehanna Asia Venture as investors are betting big on manufacturing tech sectors.

Existing investor Vertex Ventures Southeast Asia and India also participated in this round.

The firm plans to utilise the funding towards expanding its services across the US and UK while strengthening the MSME network within India, the firm’s founder and CEO Sonam Motwani, told Moneycontrol in an interaction.

Founded in 2018, Karkhana.io’s platform provides flexible and scalable solutions for contract manufacturing for a range of product categories, from small scale to large volume, product assembly to product localization. Their solution helps addresses the lack of standardization and transparency in procurement processes.

The firm works with OEMs across product categories like EVs, Medical Equipment, Consumer Electronics, Aerospace and others, helping them with a custom range of manufacturing solutions from small batch to mass production.

The platform currently has a supplier network of 500 MSMEs enabling 90-100 OEMs for their contract manufacturing requirements. In the next 3 years, the company’s vision is to empower 3000+ MSME suppliers.

“When we started off, we were highly focused high-precision mechanical components however through our journey, we realised we can have a much deeper relationship and much higher wallet-share with companies we work with, if we can provide solutions for the complete manufacturing,” Motwani told.

The firm also helps with supply-chain management and tracking for EV makers.

“EV is a growing segment and we are seeing very good demand from this segment…we see Karkhana taking the path of having the expertise to set up supply chain for EVs, for Aerospace and separate segments like this in the future,” Motwani added.

In FY23 the firm recorded around Rs 20 crores of revenues which was a growth of 7X and recorded a revenue of around Rs 150 crores in FY24.

Karkhana raised around $1.5 million in its Seed round in January of 2021 led by Vertex Ventures Southeast Asia & India. It also saw participation from several angel investors.

Investors are betting big on manufacturing and manufacturing tech enablement startups like Karkhana. In 2023, firms like Etheral Machines, Zetwerk, and Tamil Nadu-based Frigate raised funds across rounds. In fact. Karkhana closely competes with Zetwerk.

“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 maximize their capacity utilization. We were attracted to a strong Karkhana.io team that provides a differentiated technology platform addressing these challenges while enabling a much-needed layer of trust, efficiency, and quality,” said Bala Srinivasa, Managing Director, Arkam Ventures