Caddi Raises $73M Series B to Revolutionize B2B Ordering in Japan

Addressing Supply Chain Challenges in Manufacturing

The COVID-19 pandemic caused widespread disruption to manufacturing supply chains, notably creating semiconductor shortages. Consequently, numerous companies across diverse sectors have been actively seeking effective procurement solutions to restore equilibrium between supply availability and market demand.

CADDi: A B2B Platform for Manufacturing Procurement

CADDi, a Tokyo-based business-to-business (B2B) platform specializing in ordering and supply within the manufacturing and procurement sectors, facilitates a rebalancing of supply and demand. It achieves this through an automated system for calculating manufacturing costs and a comprehensive database of fabrication facilities located throughout Japan.

Recent Funding and Valuation

The company recently announced the successful completion of a $73 million Series B funding round. This round was co-led by Globis Capital Partners and World Innovation Lab (WiL), with participation from existing investors DCM and Global Brain. Furthermore, six new investors joined the round: Arena Holdings, DST Global, Minerva Growth Partners, Tybourne Capital Management, JAFCO Group, and SBI Investment.

Company Origins and Leadership

Founded in November 2017 by Yushiro Kato, serving as CEO, and Aki Kobashi, the Chief Technology Officer (CTO), CADDi has quickly established itself as a key player in the industry.

Sources familiar with the deal estimate the post-money valuation of CADDi to be $450 million.

Total Funding to Date

With this latest funding, CADDi’s total raised capital now amounts to $90.5 million. Previously, in December 2018, the company secured $9 million in a Series A round, led by DCM, and also including investments from Globis Capital Partners, WiL, and Global Brain.

Future Plans for Growth

The newly acquired funds will be strategically allocated to accelerate the platform’s digital transformation, expand the company’s workforce, and facilitate expansion into new global markets.

CADDi’s Core Functionality

“We enable integrated production of complete sets of equipment, including custom-made components like sheet metal, machined parts, and structural frames,” explained CEO and co-founder Yushiro Kato. “Our automatic quotation system, powered by a proprietary cost calculation algorithm, identifies the processing company that best aligns with order requirements regarding quality, delivery timelines, and pricing, ultimately constructing an optimized supply chain.”

Transforming the Manufacturing Landscape

CADDi’s ordering platform aims to reshape the manufacturing industry, transitioning from a traditional, multi-tiered subcontractor structure to a more streamlined, interconnected model. This new structure will emphasize the individual strengths of each manufacturer, allowing those directly involved in production to dedicate more time to crucial and innovative tasks, according to Kato.

Benefits for Supply Partners

CADDi’s platform, supported by technologies such as automatic cost calculation, optimized ordering, production management, and drawing management systems, delivers significant benefits to its over 600 Japanese supply partners. These benefits include a 10%-15% reduction in costs, stable production capacity, and a more balanced distribution of orders across various industries.

Increased Demand and Expansion

“The demand for CADDi’s services has experienced substantial growth,” Kato stated. “Our business is expanding rapidly, with recent orders exceeding those of the previous year by a factor of six. This growth has prompted us to extend our presence throughout both eastern and western Japan to effectively meet the increasing demand.”

New System Offerings

The company intends to make its production management system and drawing management system available to its customer base, Kato added.

Drawing Management SaaS

“As a starting point, we are considering the launch of ‘Drawing Management SaaS’ in the near future,” Kato explained. This software, currently used internally for CADDi’s ordering operations, will assist customers in overcoming operational challenges related to managing large volumes of drawings. The technology will not only facilitate proper document management but also enable the practical utilization of drawing data for informed decision-making and improved procurement processes.

Global Expansion Strategy

CADDi’s next phase of growth will focus on expanding into other emerging markets, particularly in Southeast Asia, Kato highlighted. “Many of our Japanese customers maintain subsidiaries and branches in these regions, creating a natural opportunity for us to strengthen our value proposition and provide more consistent and seamless service to our clients,” he said.

Future Growth Targets

As of March 2021, the startup employed 102 individuals and plans to increase its workforce to 1,000 employees within the next three years. The company aims to achieve sales of USD 9.1 billion (equivalent to 1 trillion YEN) by the year 2030.

Investor Perspectives

Masaya Kubota, a partner at World Innovation Lab, commented to TechCrunch, “CADDi’s solution for aggregating and rebalancing supply and demand has proven invaluable to both purchasers and manufacturers, especially given the disruptions caused by the pandemic. We initially invested in CADDi in 2018, recognizing their commitment to digitally transforming the traditionally analog procurement market, valued at $1 trillion.”

Kenichiro Hara, a principal at DCM, shared in an email interview with TechCrunch, “The pandemic clearly exposed vulnerabilities within the manufacturing industry’s supply chain. Disruptions such as lockdowns or factory shutdowns impacted customers’ ability to procure necessary parts, creating a ripple effect throughout the entire chain. This amplified the need for timely access to new, available suppliers, which is CADDi’s core strength.”