Zetwerk Raises $120M to Scale B2B Manufacturing Marketplace | India

Sourcing Manufacturing Components: Introducing Zetwerk

When procuring items like refrigerators or televisions, consumers typically visit electronics retailers or online marketplaces such as Amazon. However, a different challenge arises when sourcing components for cranes, machinery doors, or various machine chassis.

Increasingly, businesses worldwide are turning to Zetwerk, a startup headquartered in Bangalore, to address this need.

A B2B Marketplace for Manufacturing

Zetwerk operates as a business-to-business (B2B) marketplace focused on manufacturing items. It effectively connects original equipment manufacturers (OEMs) and engineering, procurement, and construction (EPC) clients with a network of small and medium-sized manufacturing enterprises.

All products offered through the platform are custom-made. As Amrit Acharya, co-founder and CEO of Zetwerk, explained in a TechCrunch interview, there is typically no pre-existing stock for these specialized components; orders trigger the manufacturing process.

Customer Base and Industry Reach

Zetwerk currently serves a customer base exceeding 250, a significant increase from 100 just a year ago.

These customers operate across a diverse range of industries, including process plants, oil & gas, steel, aerospace, medical devices, apparel, and luxury goods, all within the infrastructure sector.

Clients provide Zetwerk with digital designs, which are then translated into tangible physical products.

Recent Funding and Valuation

The startup’s value is increasingly recognized by investors. On Wednesday, Zetwerk announced a $120 million Series D funding round.

This round was spearheaded by existing investors Greenoaks Capital and Lightspeed Venture Partners, with participation from Sequoia Capital and Kae Capital.

This latest investment brings Zetwerk’s total funding to $193 million and values the company between $600 million and $700 million, according to sources familiar with the matter.

It is worth noting that a previously announced $21 million Series C round ultimately grew to $31 million.

The Founding Story

Zetwerk was founded by Amrit Acharya, Srinath Ramakkrushnan, Rahul Sharma, and Vishal Chaudhary.

Acharya and Ramakkrushnan initially conceived the idea while working at ITC, a Kolkata-based conglomerate.

Both alumni of IIT Madras and a Singapore exchange program, they observed the challenges product managers faced in managing numerous suppliers and manufacturing items.

From Supplier Database to Full Marketplace

The initial iteration of Zetwerk was a simple database of suppliers, created to address the lack of organized information.

However, responding to customer feedback, the company evolved into a comprehensive marketplace with integrations with external vendors.

Zetwerk now provides order tracking, manufacturing progress monitoring, and quality control checks.

A Unique Market Position

Zetwerk occupies a distinctive position in the market. Shailesh Lakhani, managing director at Sequoia India, suggests the startup has pioneered a new category of marketplace.

Currently, Zetwerk faces limited direct competition within India or South Asia, primarily contending with domain project consultants in the offline sector.

Market Opportunity and Growth Potential

The potential within India is substantial. Industry reports indicate that manufacturing currently contributes 14% to India’s GDP.

Lightspeed partner Vaibhav Agarwal estimates the Indian market size at $40 billion to $60 billion, with additional opportunities arising from global trade trends.

The trend of companies expanding or relocating manufacturing to India, driven by import duties and geopolitical factors, further amplifies this opportunity.

“India possesses significant manufacturing depth, much of which remains untapped,” stated Acharya.

Future Plans and Expansion

Zetwerk experienced a 3X growth in the past year, achieving revenue of $43.9 million in the financial year ending March – a 20X increase from the previous year.

The company intends to utilize the new capital to expand into additional product categories and enhance its technology infrastructure.

Consumer goods, which now account for 15% of revenue generated in the last six months, represent a key area of expansion.

Currently, 25 of Zetwerk’s customers are located in the U.S., Canada, Europe, and other international markets. The startup plans to establish overseas offices this year to pursue further international growth.

“We are excited to partner with Zetwerk on the next leg of their journey, as they expand their value proposition globally. Zetwerk’s operating system for manufacturing has digitized multiple supply chains end-to-end, ensuring on-time delivery and high quality standards. This has led to rapid growth in India and internationally, with the potential to quickly become one of the most important manufacturing platforms globally,” said Neil Shah, partner at Greenoaks Capital.