In 2016, when IIT Bombay graduate Sonam Motwani was working to expand the capacity of Procter & Gamble’s sanitary napkins, she found herself stuck while trying to solve manufacturing processes.
“It was challenging to find reliable suppliers in India who could meet quality expectations,” she notes. Sonam is the founder of Mumbai-based Karkhana.io, a B2B (business-to-business) on-demand manufacturing startup.
Even with crores of small and medium enterprises (SMEs), most companies find it difficult to find manufacturers. “For me, that was the turning point, where I started thinking about the manufacturing space more and more. I started my groundwork to understand the reasons for the issues,” Sonam tells YourStory.
According to Sonam, it takes up a lot of effort and micromanagement to sort out the entire procurement process of different manufacturing parts.
This is why large companies have a big sourcing fee for components since they spend a lot of time and resources to manage their inventory with their suppliers.
“You continuously have to be on calls and emails to get updates. Nothing is streamlined and there’s very little transparency,” she says.
Karkhana.io’s journey began with a simple premise. “Why not have a technology-enabled manufacturing platform that makes it simpler and faster for companies to manufacture or procure these custom parts?”
These parts are not something that are available off-the-shelf, they have to be built and customised for a company in a certain way.
Early-Years
Karkhana.io started with a team of three people in 2018 in Mumbai.
The idea was simple: build a platform that lists small manufacturers, which could then work with large companies to procure their custom products.
Initially, Karkhana.io’s team started working with startups and companies in the space to figure out the problems and find solutions.
“When they’re [startups] starting out, they want to build their first prototype, it is difficult for them to find manufacturers who take them seriously and keep the priority for them,” says Sonam.
This is where Karkhana.io came in.
“We would have smart people, who would listen to their [startups] problems and figure out manufacturing for them,” she adds.
Building capabilities
At that point, Karkhana.io wasn’t focused on any one industry or product.
“But, by doing this exercise, we figured out a bunch of manufacturing processes that everybody needs,” Sonam says. “Most of the manufacturing requirements are sufficed by five- six manufacturing processes.”
Sonam, with her team, started building around these capabilities and raw materials, such as a few types of plastics and metals or other metal alloys that most companies require.
“And similarly, we also started seeing patterns around it. Some industry categories were getting better traction,” says Sonam.
Today, Karkhana.io has capabilities in CNC machining, high and thin sheet metal fabrication, plastic components both in low volume as well as high volume, 3D printing as well as injection moulding and vacuum casting.
Karkhana.io has built a supplier base– SMEs – around these processes and materials.
“Similarly, we figured that the kind of companies, who generally have the need to outsource their manufacturing and want to focus their own resources on their core offering and technology behind their products, worked very well for us,” says Sonam.
Karkhana.io says it would be an apt partner for companies building technology products like electric vehicles, robots, industrial automation, special purpose machines, medical devices.
The Value Proposition
Currently, the startup, with a team of 40 employees, has close to 500 suppliers spread across technologies and geographies.
“Our suppliers are limited by the capability to grow the business across different industries and in terms of the workforce they have,” says Sonam. With the platform, they get exposed to business from multiple industries and can scale quickly.
“We can give them a continuous feed of business. They can continue focusing on running their operations. We also help them with the right kind of processes,” she adds.
For its 50 customers, which includes the likes of P&G, Bosch, Pidilite, Jio, Karkhaana.io is the single source of supply of their product.
“They don’t have to work with each individual supplier for each individual component,” says Sonam.
Karkhana.io facilitates this interaction through a technology platform, which the suppliers can access. Other aspects of the business, such as billing and quality control are all built into the platform’s technology infrastructure.
Order-matching
The startup’s engineers work through these SMEs to help them deal with complex projects.
Karkhana.io says it onboards suppliers, whose revenues fall anywhere between Rs 5 and Rs 150 crore, after rigorous checks and parameters. This helps the startup evaluate their capacity, quality, and competencies.
For large orders, Karkhana.io says it does not work with small manufacturers. “We have to make sure that there is an appropriate matching, because ultimately our customer also needs reliable output,” Sonam says.
Presently, this process is manual, done by the team at Karkhana.io, but it plans to digitise some part of the process with the data they have collected.
The road ahead
Sonam is optimistic about the future. “A lot of geopolitical changes are happening now, and a lot of supply chain disruptions. India is getting better placed in becoming the manufacturing ecosystem,” she says. “More companies are looking to establish or grow their supply chains in India.”
“We are looking at strengthening our supply chain and our supply partners,” she adds.
Karkhana.io generates revenue via a fee from its customers. The company has raised a seed funding of $1.5 million led by Vertex Ventures Southeast Asia & India in January last year.
In India, Zetwerk offers similar solutions as Karkhana.io. The startup’s international peers include Xometry, Fictiv and Protolabs.
