Fractory Secures $9M to Revolutionize Metal Manufacturing Supply Chain

The Evolution of Manufacturing and Fractory's Role

The manufacturing sector experienced significant disruption during the COVID-19 pandemic. However, indications of recovery are emerging, driven by initiatives aimed at enhancing factory responsiveness to dynamic demand fluctuations.

Fractory Secures Series A Funding

Fractory, a startup focused on flexible custom manufacturing, has announced a $9 million (€7.7 million) Series A funding round. This investment highlights the growing trend towards adaptable manufacturing solutions.

Investment Details and Participants

OTB Ventures led the funding round, with participation from existing investors including Trind Ventures, Superhero Capital, United Angels VC, Startup Wise Guys, and Verve Ventures. OTB Ventures specializes in early-growth, high-tech startups.

Fractory's Platform and Location

Originally founded in Estonia and now headquartered in Manchester, England, Fractory has developed a platform designed to streamline the process of ordering custom metalwork. The location provides proximity to both customers and a historically strong manufacturing base.

Expanding Technology and Partnerships

The Series A funding will be allocated to further development of Fractory’s technology and the expansion of its partner network. This will enable the company to broaden its reach and capabilities.

Customer and Manufacturer Network

To date, Fractory has collaborated with over 24,000 customers and hundreds of manufacturers and metal companies. Collectively, they have produced more than 2.5 million metal parts.

Focus on Enterprise Software

Fractory operates as an enterprise software provider, facilitating a marketplace connecting companies needing metal parts with manufacturers capable of fulfilling those requests. Intelligent tools are used to match job requirements with specialist manufacturers.

Addressing Supply and Demand Challenges

The core challenge Fractory addresses mirrors issues common in industries with variable supply and demand, fragmentation, and inefficient sourcing processes.

The Problem of Fragmented Sourcing

Martin Vares, Fractory’s founder and CEO, explains that companies often rely on a single factory for metal parts. However, disruptions at that factory necessitate a time-consuming and costly search for alternative suppliers.

A One-Stop Shop for Manufacturing

“The market is highly fragmented, and connecting product needs with manufacturing capabilities is complex,” Vares stated. “We provide a centralized platform, eliminating the need for individual outreach to numerous suppliers.”

Optimizing Factory Capacity

Manufacturers are consistently seeking ways to maximize their operational capacity and minimize downtime. Avoiding idle workforce and machinery is a key priority.

Addressing Underutilized Capacity

Vares noted that the average uptime capacity in metalwork plants is around 50%. Fractory aims to address this issue of leftover capacity, promoting market efficiency and reducing waste, ultimately enhancing factory sustainability.

The Fractory Marketplace Model

Customers, typically in industries like construction, shipbuilding, aerospace, and automotive, upload CAD files detailing their requirements. These files are then distributed to a network of manufacturers for bidding – similar to a freelance marketplace for manufacturing.

Automation and Expert Assistance

Approximately 30% of jobs are fully automated, while the remaining 70% benefit from Fractory’s expertise in areas such as quoting, manufacturing, and delivery. The company plans to increase the level of automation through further technological investment.

Expanding Service Offerings

Currently, Fractory’s platform supports laser cutting, metal folding, and CNC machining. Future plans include integrating industrial additive 3D printing and exploring other materials like stonework and chip making.

Modernizing a Traditional Industry

Manufacturing has historically been slow to adopt modernization, due to the high cost and complexity of equipment. However, companies offering intelligent software to optimize legacy equipment are gaining traction.

Comparison to Industry Leaders

Xometry, a U.S.-based competitor, recently went public with a market capitalization exceeding $3 billion. Other players in the space include Hubs (now part of Protolabs) and Qimtek.

Prioritizing Local Manufacturing

Fractory emphasizes local manufacturing to minimize logistical complexities and reduce carbon emissions. The company’s commitment to this approach will be evaluated as it expands.

Investor Confidence in Fractory's Future

Investors express confidence in Fractory’s approach and rapid growth, believing the company is poised to make a significant impact on the manufacturing industry.

OTB Ventures' Perspective

Marcin Hejka of OTB Ventures highlighted Fractory’s unique enterprise software platform and its demonstrable value in automating and digitizing manufacturing supply chains. He also praised the team’s talent and track record of international growth.