Katana Secures $11 Million in Series A Funding

Katana, a startup originating in Estonia, has successfully completed a $11 million Series A funding round. The company specializes in developing enterprise resource planning (ERP) software tailored for small and medium-sized businesses (SMBs) within the manufacturing sector.

Investment Details

This funding round was spearheaded by Atomico, a prominent European venture capital firm. Notable angel investors also participated, including Ott Kaukver (CTO of Checkout.com), Sten Tamkivi (CPO of Topia, previously with Skype), Sergei Anikin (CTO at Pipedrive), and Kairi Pauskar (formerly an HR Architect at TransferWise).

Existing investor 42Cap also contributed to this round, bringing the total funding raised by Katana to $16 million to date.

Addressing a Market Need

Established in 2017 by Kristjan Vilosius (CEO), Priit Kaasik (engineering lead), and Hannes Kert (CCO), Katana aims to be the essential tool for “entrepreneur manufacturers.”

The company offers a readily implementable ERP solution designed for small to medium-sized manufacturers. Its core purpose is to help businesses move away from outdated methods like spreadsheets and legacy systems for managing production and inventory.

The Rise of Independent Manufacturing

Katana is capitalizing on current market trends, including the growth of online marketplaces and direct-to-consumer (D2C) e-commerce. These trends are fueling a surge in independent makers across diverse industries, from cosmetics and home décor to electronics, apparel, and food & beverage.

“A global resurgence of small-scale manufacturing is underway, driven by the expansion of e-commerce platforms and consumer demand for customized, locally-produced goods,” explains Vilosius. “In major cities worldwide, workshops are flourishing. Entrepreneurs are crafting organic cosmetics and building electric bikes, serving both traditional and direct-to-consumer channels, including e-commerce stores and marketplaces.”

Katana’s Solution

However, small and medium-sized manufacturers often lack the appropriate software to effectively manage the workflows required for selling through multiple channels. This is the gap Katana seeks to fill.

The software boasts a user-friendly interface specifically designed for boutique manufacturing. It provides functionalities such as inventory control and optimization, material purchasing, bill-of-materials management, and cost tracking.

Furthermore, Katana offers an API and integrates with popular e-commerce platforms and accounting tools, including Shopify, Amazon, WooCommerce, QuickBooks, and Xero.

Ease of Implementation

“We’ve developed the world’s most easily self-implemented manufacturing ERP, which is a key differentiator,” Vilosius states. “Over half of Katana’s users can onboard themselves without assistance. Getting Katana operational typically takes less than a week, a significant improvement over the months required by competitors.”

A Practical Example

Consider a small manufacturer utilizing Shopify as their primary sales channel. Upon integration, Katana automatically retrieves orders from Shopify and verifies product availability for immediate shipment.

If a product is out of stock, Katana indicates whether the necessary raw materials are available and provides an estimated completion date. “We oversee the entire process, from receiving raw materials to planning manufacturing, execution, and final shipment,” says Vilosius.

Atomico’s Perspective

Ben Blume, a partner at Atomico, who will be joining Katana’s board, shared his thoughts: “Atomico has consistently recognized the strength of engineering and product development originating from Estonia. Our assessment of the Katana team revealed a familiar pattern: a team intensely focused on the product, with an exceptional ability to understand and build solutions from the customer’s perspective, and a firm conviction that a new generation of manufacturers deserves world-class technology.”

He continued, “These manufacturers shouldn’t be forced to settle for anything less.”