Manufacturing Tech Company Raises Investment & Creates Strategic Partnership
Fractory, member of Estonian Chamber of Commerce and Industry, has raised 4.8 million euros. The increased capital will be used to grow Fractory in territories where the company already operates, and where foundations are well-established, most especially the UK and Scandinavia. Specifically, Fractory aims to become an irreplaceable partner for its growing client base, achieving this by increasing the capabilities it offers and the capacities it handles.
Fractory started in 2017 in the Estonian market and has at least doubled its turnover each year.
Martin Vares, Fractory’s CEO, explains recent growth and plans for further growth:
"This year we received our first order of more than £2 million. In the beginning, orders were smaller and customers appreciated us mostly for our platform's automation, speed and convenience. But more customers now also recognise our network of supply partners, the quality and delivery reliability they represent. The new investment will help us grow exactly this type of customer as we expand our network of quality-assured partners and simplify supply chains for customers.”
Investment came from Finland
The €4.8m round is led by a brand-new early-stage investment company, Kvanted, whose focus is on companies building industrial technologies in Northern Europe.
“Kvanted understands what we are doing,” says Martin Vares. They have a longer-than-average investment period to align with the lengthier development cycles in industrial tech. And they act as a connector, in our case bringing innovative technology providers together with traditional industrial companies. Kvanted has broad industry experience and unique networks, and their fund investors include prominent industrial players such as Oras Invest. It’s the best possible strategic partnership for Fractory at this stage.”
Kvanted's founding partner, Axel Ahlström, says, “There’s a lot of untapped potential in the industrial sector, and our aim is to accelerate industrial innovation, connecting industrial technology startups with established corporations. Fractory, which is one of those startups, is already on an impressive trajectory, with increasing client numbers, and our aim is to help it become more widely adopted across industry. Fractory’s important position in the world of manufacturing is clear to us and we see the scope for its growth increasing through this partnership.”
Other Investors
Other participants in the funding round include all those venture capital groups, angel investors and entrepreneurs who have bought into Fractory since it launched in 2017, amongst them Superhero Capital, OTB Ventures, Trind Ventures, United Angels VC, Startup Wise Guys and Verve Ventures.
“That existing investors are increasing their interest is a sign of approval,” says Martin Vares, Fractory CEO. “VC’s, like Superhero Capital, continuing to back us is a vote of confidence in our considerable potential. Also, that entrepreneurs like Taavi Kotka are with us again in this round is important.”
Taavi Kotka, the former CIO of the Estonian government and well-known software developer and angel investor, who has been an investor in Fractory since the very start, says: “Fractory is experiencing meaningful momentum and it’s easy to see where it is going with its important manufacturing solution. I believe in the transformative impact Fractory holds for the industrial sector. And I believe in the founders, in the wider team and their vision. And now in cooperation with Kvanted – a specialist investor with a strong focus on industrial efficiencies – Fractory is well-positioned to grow further, faster.”