B2B on-demand manufacturing platform Karkhana.io raises $6.3M in a Series A round

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, with existing investor Vertex Ventures Southeast Asia and India also participating.

The funding comes three years after it raised $1.5 million in a Seed round from Vertex Ventures Southeast Asia & India

International expansion 

Karkhana.io said the raised capital is aimed at expanding its services internationally, particularly across the US and UK. Additionally, the startup aims to strengthen its network within India's MSME (medium, micro, and small enterprise) sector.

“This funding extends beyond growing our platform; it's a dedication to fortifying India's MSME (medium, micro, and small enterprise) ecosystem. We want to create a significant impact in sectors with expansive growth potential, addressing surging demand and propelling Karkhana.io to redefining the landscape of the Indian manufacturing industry,” said Sonam Motwani, Founder and CEO, Karkhana.io.

Offering contract manufacturing solutions

Founded in 2018 by Sonam Motwani and Karthik MC, Karkhana.io offers flexible and scalable contract manufacturing solutions across various product categories, including EVs, Medical Equipment, Consumer Electronics, and Aerospace. 

The startup addresses critical issues like lack of standardization and transparency in procurement processes. Currently, it boasts a network of over 400 MSMEs, supporting around 90 OEMs. Its vision extends to empowering over 3000 MSME suppliers in the next three years.

How well Karkhana.io is performing financially

karkhana.io has demonstrated impressive financial growth, with revenues reaching around Rs 150 crore in FY24, a significant increase from Rs 20 crore in FY23. 

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

Industry future

As per Karkhana, India’s manufacturing sector is expected to be worth $1 trillion by 2025-26, and contributions from MSMEs will be pivotal in achieving this lofty goal.

Factors such as competitive pricing, extensive labour pools, rising domestic demand and geopolitical considerations such as the China Plus Pne 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, it added.

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