Arkam Ventures and Susquehanna Asia Venture Capital lead USD 6.3M Series-A round in Karkhana.io

Sonam Motwani,

Mumbai, 10 January 2024: Karkhana.io, a custom manufacturing platform driving digital transformation for India’s manufacturing MSMEs, today announced its Series A funding of USD 6.3 Million led by Arkam Ventures and Susquehanna Asia Venture Capital. The round also saw participation from existing investors Vertex Ventures Southeast Asia and India. The new funding will be deployed to fuel the expansion of its supplier base, establish a robust electronics supply chain, and drive scaling efforts in the US and Europe.

India’s manufacturing sector is expected to be worth USD 1 trillion by 2025-26, and contributions from MSMEs will be pivotal in achieving this lofty goal. Factors such as competitive pricing, extensive
labor pools, rising domestic demand, and geopolitical considerations such as China plus one strategy place India as a manufacturing destination for the world. If equipped with the right resources, India’s 63 million-strong MSME ecosystem has the potential to become an integral part of the manufacturing supply chain for global businesses across Electronics, Aerospace, Clean Energy, and Auto parts.

Against this backdrop, Karkhana.io’s tech-enabled platform is well poised to provide sourcing and contract manufacturing solutions to OEMs and tech companies, through its manufacturing MSMEs network in India. 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 400+ MSMEs enabling 90+ OEMs for their contract manufacturing requirements. In the next 3 years, the company’s vision is to empower 3000+ MSME suppliers.

Announcing the latest fundraise, Sonam Motwani, Founder and CEO, Karkhana.io, said: Our investors; trust underscores our commitment to revolutionise manufacturing through technology, offering flexible and scalable solutions. This funding extends beyond growing our platform; it’s a dedication to fortifying India’s MSME ecosystem. 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.

Announcing its investment in Karkhana.io, Bala Srinivasa, Managing Director, Arkam Ventures said. “India’s manufacturing MSMEs account for 45% of industrial output and 40% of all exports.
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.”

Speaking about the investment in Karkhana.io, Bhavani Rana, Investment Advisor at Susquehanna Asia Venture Capital, stated, “The COVID-19 pandemic has highlighted the vulnerability of global supply chains and the need for diversification. India is emerging as a viable manufacturing destination leveraging its advantages in value-added precision industries, low-cost skilled labour, and supportive government policies. To capitalise on this, Karkhana.io uses its technology-based custom manufacturing platform, which enables it to provide quick, dependable precision-manufacturing solutions that help OEMs or technology companies expand into new markets by enabling export growth, localising imports, and meeting domestic demand increases.”

Kanika Mayar, Partner, Vertex Ventures Southeast Asia and India, expressed her enthusiasm about supporting the funding round, and said, “We remain impressed by Karkhana.io’s capacity to address the evolving needs of equipment manufacturers and brands seeking streamlined and scalable manufacturing solutions. This investment strengthens our commitment towards supporting ventures that bring deep innovation to traditional sectors.”

Karkhana.io’s digital platform streamlines and simplifies the sourcing process, providing a single dashboard for companies to access a network of vetted suppliers, regardless of their scale, and overcome manufacturing inefficiencies. Over the years, Karkhana.io has helped MSMEs establish their businesses as well as enabled enterprises to increase their production by utilizing its capacity. This Series A funding propels Karkhana.io into an accelerated phase of its mission to grow its manufacturing capacity through the strength of MSMEs as a backbone, thereby contributing to the growth story of India.