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Custom manufacturing platform Karkhana.io has raised $6.3 million in a Series A funding round led by Arkam Venturesand Susquehanna Asia Venture Capital. Vertex Ventures Southeast Asia and India, an existing investor, also participated in the round.

The funds will be deployed to fuel expansion of the company’s supplier network, establish an electronics supply chain, and drive scaling efforts in the United States and Europe.

India’s manufacturing sector is expected to be worth $1 trillion by 2025-26, and contribution from micro, small, and medium-sized enterprises (MSMEs) will be crucial in achieving this target. Factors such as competitive pricing, extensive labour pools, rising domestic demand, and geopolitical considerations such as the China Plus One strategy place India as a manufacturing destination for the world.

“Our investors’ trust underscores our commitment to revolutionise manufacturing through technology, offering flexible and scalable solutions. 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,” said Sonam Motwani, Founder and CEO, Karkhana.io.

Karkhana.io’s tech-enabled platform offers sourcing and contract manufacturing solutions to original equipment manufacturers (OEMs) and technology companies. Leveraging its network of manufacturing MSMEs in India, the company works with OEMs in various sectors such as electric vehicles, medical equipment, consumer electronics, and aerospace. 

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The platform currently has a supplier network of over 400 MSMEs, serving the contract manufacturing needs of 90 OEMs. Over the next three years, Karkhana.io aims to empower more than 3,000 MSME suppliers.

“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. 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 and quality,” said Bala Srinivasa, Managing Director, Arkam Ventures. 

Founded in 2018, Karkhana.io streamlines contract manufacturing across product categories, from small to large scale and product assembly to localisation. Its digital platform addresses procurement challenges with a single dashboard, connecting companies to vetted suppliers, irrespective of size, and overcoming manufacturing inefficiencies.