The company realized months ago that it could be running afoul of pay laws in a number of countries but has been slow to fix the problem, according to internal documents.
The manufacturing industry took a hard hit from the Covid-19 pandemic, but there are signs of how it is slowly starting to come back into shape — helped in part by new efforts to make factories more responsive to the fluctuations in demand that come with the ups and downs of grappling with the shifting economy, virus outbreaks and more. Today, a businesses that is positioning itself as part of that new guard of flexible custom manufacturing — a startup called Fractory — is announcing a Series A of $9 million (€7.7 million) that underscores the trend.
The funding is being led by OTB Ventures, a leading European investor focussed on early growth, post-product, high-tech start-ups, with existing investors Trind Ventures, Superhero Capital, United Angels VC, Startup Wise Guys and Verve Ventures also participating.
Founded in Estonia but now based in Manchester, England — historically a strong hub for manufacturing in the country, and close to Fractory’s customers — Fractory has built a platform to make it easier for those that need to get custom metalwork to upload and order it, and for factories to pick up new customers and jobs based on those requests.
Fractory’s Series A will be used to continue expanding its technology, and to bring more partners into its ecosystem.
To date, the company has worked with more than 24,000 customers and hundreds of manufacturers and metal companies, and altogether it has helped crank out more than 2.5 million metal parts.
To be clear, Fractory isn’t a manufacturer itself, nor does it have no plans to get involved in that part of the process. Rather, it is in the business of enterprise software, with a marketplace for those who are able to carry out manufacturing jobs — currently in the area of metalwork — to engage with companies that need metal parts made for them, using intelligent tools to identify what needs to be made and connecting that potential job to the specialist manufacturers that can make it.
The challenge that Fractory is solving is not unlike that faced in a lot of industries that have variable supply and demand, a lot of fragmentation, and generally an inefficient way of sourcing work.
As Martin Vares, Fractory’s founder and MD, described it to me, companies who need metal parts made might have one factory they regularly work with. But if there are any circumstances that might mean that this factory cannot carry out a job, then the customer needs to shop around and find others to do it instead. This can be a time-consuming, and costly process.
“It’s a very fragmented market and there are so many ways to manufacture products, and the connection between those two is complicated,” he said. “In the past, if you wanted to outsource something, it would mean multiple emails to multiple places. But you can’t go to 30 different suppliers like that individually. We make it into a one-stop shop.”
On the other side, factories are always looking for better ways to fill out their roster of work so there is little downtime — factories want to avoid having people paid to work with no work coming in, or machinery that is not being used.
“The average uptime capacity is 50%,” Vares said of the metalwork plants on Fractory’s platform (and in the industry in general). “We have a lot more machines out there than are being used. We really want to solve the issue of leftover capacity and make the market function better and reduce waste. We want to make their factories more efficient and thus sustainable.”
The Fractory approach involves customers — today those customers are typically in construction, or other heavy machinery industries like ship building, aerospace and automotive — uploading CAD files specifying what they need made. These then get sent out to a network of manufacturers to bid for and take on as jobs — a little like a freelance marketplace, but for manufacturing jobs. About 30% of those jobs are then fully automated, while the other 70% might include some involvement from Fractory to help advise customers on their approach, including in the quoting of the work, manufacturing, delivery and more. The plan is to build in more technology to improve the proportion that can be automated, Vares said. That would include further investment in RPA, but also computer vision to better understand what a customer is looking to do, and how best to execute it.
Currently Fractory’s platform can help fill orders for laser cutting and metal folding services, including work like CNC machining, and it’s next looking at industrial additive 3D printing. It will also be looking at other materials like stonework and chip making.
Manufacturing is one of those industries that has in some ways been very slow to modernize, which in a way is not a huge surprise: equipment is heavy and expensive, and generally the maxim of “if it ain’t broke, don’t fix it” applies in this world. That’s why companies that are building more intelligent software to at least run that legacy equipment more efficiently are finding some footing. Xometry, a bigger company out of the U.S. that also has built a bridge between manufacturers and companies that need things custom made, went public earlier this year and now has a market cap of over $3 billion. Others in the same space include Hubs (which is now part of Protolabs) and Qimtek, among others.
One selling point that Fractory has been pushing is that it generally aims to keep manufacturing local to the customer to reduce the logistics component of the work to reduce carbon emissions, although as the company grows it will be interesting to see how and if it adheres to that commitment.
In the meantime, investors believe that Fractory’s approach and fast growth are strong signs that it’s here to stay and make an impact in the industry.
“Fractory has created an enterprise software platform like no other in the manufacturing setting. Its rapid customer adoption is clear demonstrable feedback of the value that Fractory brings to manufacturing supply chains with technology to automate and digitise an ecosystem poised for innovation,” said Marcin Hejka in a statement. “We have invested in a great product and a talented group of software engineers, committed to developing a product and continuing with their formidable track record of rapid international growth
Breef raised $3.5 million in funding to continue developing what it boasts as “the world’s first online marketplace” for transactions between brands and agencies.
Greycroft led the round and was joined by Rackhouse Ventures, The House Fund, John and Helen McBain, Lance Armstrong and 640 Oxford Ventures. Including the new round, the New York and Colorado-based company has brought in total funding of $4.5 million since its inception in 2019 by husband-and-wife co-founders George Raptis and Emily Bibb.
Bibb’s background is in digital marketing and brand building at companies like PopSugar, VSCO and S’well, while Raptis was on the founding team at fintech company Credible.com.
Both said they experienced challenges in finding agencies, which traditionally involved asking for referrals and then making a bunch of calls. There were also times when their companies would be in high demand for talent, but didn’t necessarily need a full-time employee to achieve the goal or project milestone.
While the concept of outsourcing is not new, Breef’s differentiator is its ability to manage complex projects: a traditional individual freelance project is less than $1,000 and takes a week or less. Instead, the company is working with team-based projects that average $25,000 with a length of engagement of about six months, Raptis said.
Breef’s platform is democratizing how brands and boutique agencies connect with each other in the process of planning, scoping, pitching and paying for projects, Raptis told TechCrunch.
“At the core, we are taking the agency online,” Bibb added. “We are building a platform to streamline a complicated process for outsourcing high-value work and allow users to find, pay for and work with agencies in days rather than months.”
Brands can draft their own brief to articulate what they need, and Breef will connect them to a short list of agencies that match those requirements. Rather than a one- or two-month search, the company is able to bring that down to five days.
Bibb and Raptis decided to seek venture capital after experiencing demand — millions of dollars in projects are being created on the platform each month — and some tailwinds from the shift to remote work. They saw many brands that may have originally utilized in-house teams or agencies of record turn to distributed or smaller teams.
Due to the nature of agency work being expensive, Breef is processing large amounts of money over the internet, and the founders want to continue developing the technology and hiring talent so that it is a secure and trustworthy system.
It also launched its buy now, pay later project funding service, Breef(pay), to streamline payments to agencies and reduce cash flow challenges. Users can construct their own payment terms, mix up the way they are paid and utilize a credit line or defer payments to control external spend.
To date, Breef has more than 5,000 vetted boutique agencies in 20 countries on its platform and is able to save its users an average of 32% in product costs compared with a traditional agency model. It boasts a customer list that includes Spotify, Brex, Shutterstock, Bluestone Lane and Kinrgy.
Kevin Novak, founder of Rackhouse Ventures, said he met Raptis through the Australian tech community. He recently launched his first fund targeting startups in novel applications of data.
“When they were talking to me about what they wanted to do, I got intrigued,” Novak said. “I like finding marketplaces where the idea is well understood by the people involved. Looking at the matching problem, Emily and George have found a unique way to find ad agencies that hasn’t existed before.”
Payroll automation is not exactly the sexiest of startup areas but it’s a pretty decent business. The larger startup in the space is Payfit which has raised upwards of $208.4M to do something that lots of companies find quite painful. But Payfit does a lot of other things as well, potentially leaving it exposed. Now a startup aims to come along and hone in on the thorny issue of payroll automation, alone.
Founded by Jonas Bøgh Larsen and Emil Hagbarth Rasmussen, Danish firm Pento has raised $15.6 million in a Series A funding led by General Catalyst. Also participating was Avid Ventures and the UK’s LocalGlobe. Existing investors Point Nine Capital, Moonfire Ventures, Hustle Fund, and Seedcamp also took part, alongside angels (see below). This latest funding takes the total raised by Pento to $18.4 million.
The startup claims 700 companies are using it including tech firms Pleo and Cuvva; large hospitality brands (Honest Burgers); and retail and e-commerce brands (Lacoste, Beauty Pie). Pento replaces spreadsheets etc and gives them cloud-based tools, real-time calculations, transparency, and online and telephone support.
Pento co-founder and CEO, Jonas Bøgh Larsen told me: “The biggest process we’re replacing is payroll outsourcing where companies are outsourcing payroll to an accountant, which the vast majority of companies do in Europe. We automate the entire process from reporting to tax calculations to payments. So, what most other platforms or payable products do is basically just helping you calculate the right taxes and National Insurance, and so on. We also take care of the reporting. We also do payments, and we integrate the product to other HR products.”
Adam Valkin, Managing Director at General Catalyst said: “Despite being so business-critical, payroll is one of the least digitally advanced services across the globe. It’s also one that has garnered a reputation for being too complex, too convoluted and too out of reach for those who aren’t payroll specialists, leading many to consider expensive outsourcing as the only route to go. Pento dispels this myth because it’s built purely with HR and finance teams in mind, by business leaders who truly understand the frustrations involved. It’s easy-to-use, transparent, flexible, secure and affordable. It’s what payroll should be in a modern company and it represents the future of employee compensation.”
Pento’s angel are from Stripe (Thairu and Diede van Lamoen), Monzo (Tom Blomfield), GoCardless (Matt Robinson), Zoom (Eric Yuan), Cuvva (Freddy Macnamara), Intercom (Des Traynor) and others.
SLAs, SLOs, SLIs. If there’s one thing everybody in the business of managing software development loves, it’s acronyms. And while everyone probably knows what a Service Level Agreement (SLA) is, Service Level Objectives (SLOs) and Service Level Indicators (SLIs) may not be quite as well known. The idea, though, is straightforward, with SLOs being the overall goals a team must hit to meet the promises of its SLA agreements, and SLIs being the actual measurements that back up those other two numbers. With the advent of DevOps, these ideas, which are typically part of a company’s overall Site Reliability Engineering (SRE) efforts, are becoming more mainstream, but putting them into practice isn’t always straightforward.
Noble9 aims to provide enterprises with the tools they need to build SLO-centric operations and the right feedback loops inside an organization to help it hit its SLOs without making too many trade-offs between the cost of engineering, feature development and reliability.
The company today announced that it has raised a $21 million Series B round led by its Series A investors Battery Ventures and CRV. In addition, Series A investors Bonfire Ventures and Resolute Ventures also participated, together with new investors Harmony Partners and Sorenson Ventures.
Before starting Nobl9, co-founders Marcin Kurc (CEO) and Brian Singer (CPO) spent time together at Orbitera, where Singer was the co-founder and COO and Kurc the CEO, and then at Google Cloud, after it acquired Orbitera in 2016. In the process, the team got to work with and appreciate Google’s site reliability engineering frameworks.
As they started looking into what to do next, that experience led them to look into productizing these ideas. “We came to this conclusion that if you’re going into Kubernetes, into service-based applications and modern architectures, there’s really no better way to run that than SRE,” Kurc told me. “And when we started looking at this, naturally SRE is a complete framework, there are processes. We started looking at elements of SRE and we agreed that SLO — service level objectives — is really the foundational part. You can’t do SRE without SLOs.”
As Singer noted, in order to adopt SLOs, businesses have to know how to turn the data they have about the reliability of their services, which could be measured in uptime or latency, for example, into the right objectives. That’s complicated by the fact that this data could live in a variety of databases and logs, but the real question is how to define the right SLOs for any given organization based on this data.
“When you go into the conversation with an organization about what their goals are with respect to reliability and how they start to think about understanding if there’s risks to that, they very quickly get bogged down in how are we going to get this data or that data and instrument this or instrument that,” Singer said. “What we’ve done is we’ve built a platform that essentially takes that as the problem that we’re solving. So no matter where the data lives and in what format it lives, we want to be able to reduce it to very simply an error budget and an objective that can be tracked and measured and reported on.”
The company’s platform launched into general availability last week, after a beta that started last year. Early customers include Brex and Adobe.
As Kurc told me, the team actually thinks of this new funding round as a Series A round, but because its $7.5 million Series A was pretty sizable, they decided to call it a Series A instead of a seed round. “It’s hard to define it. If you define it based on a revenue milestone, we’re pre-revenue, we just launched the GA product,” Singer told me. “But I think just in terms of the maturity of the product and the company, I would put us at the [Series] B.”
The team told me that it closed the round at the end of last November, and while it considered pitching new VCs, its existing investors were already interested in putting more money into the company and since its previous round had been oversubscribed, they decided to add to this new round some of the investors that didn’t make the cut for the Series A.
The company plans to use the new funding to advance its roadmap and expand its team, especially across sales, marketing and customer success.
The government is encouraging more factories, but C.E.O.s say labor costs in the country remain high.
The Trump administration’s moves to decouple the two economies means less leverage over Beijing’s green policies.
As the president clashes with the courts, some companies and investors say tougher limits on temporary work visas will help push jobs overseas.
Joe Biden’s economic proposals show how the president has shifted the playing field toward protectionism. But there may be fewer jobs to lose, or regain.
For founders who have a startup idea — but few engineering skills to make it a reality — making the team’s first technical hire can be a daunting task.
Nontechnical founders will face greater challenges when it comes to sourcing and recruiting engineering talent, but another factor that raises the stakes: They must often act quickly to find someone who could very well end up with co-founder status.
We interviewed a handful of startup founders and technical leaders to get their thoughts about how nontechnical founders should approach the hiring process for engineer no. 1.
Their advice spanned how to handle technical interviews, sourcing technical talent, how to decide whether your first engineering hire should become CTO — and how to best kick the can down the road if you’re not ready to start worrying about bringing on an engineer quite yet. Everyone I spoke to was quick to caution that their tips weren’t one-size-fits-all and that overcoming limited knowledge often comes down to tapping the right people to help you out and lend a greater understanding of your options.
I’ve broken down these tips into a digestible guide that’s focused on four areas:
- Sourcing technical candidates.
- How to conduct interviews.
- Making an offer.
- Taking a nontraditional route.
Sourcing technical candidates
Knowing what you’re looking for obviously depends a good deal on what you need. Founders have more flexibility if they’re just aiming to get engineers on board so they can get an MVP out the door, but technical expertise is only part of the equation if you’re aiming to hire for someone that may end up being a co-founder or CTO.
Before sketching out a plan to keep more jobs in the United States, the former vice president denounced his rival over revelations in a new book that the president knowingly minimized the coronavirus’s dangers.
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Working from home creates economic winners and losers. It can benefit highly skilled employees but depress others’ wages and make it hard to organize.
It’s a moment of reckoning for global supply chains. But that doesn’t mean companies are flocking back to the United States.
The coronavirus pandemic is forcing America to confront its epidemic low-wage problem.
Companies caught short by the pandemic are hiring from a pool that was already prepared to handle a surge in phone traffic away from offices.