CapGrid, a B2B commerce company specializing in sourcing & procurement of direct-material supplies, has successfully raised INR 4.1 crores (USD 550K) seed funding from Anicut Angel Fund, Axilor Ventures and Firstcheque. The B2B startup plans to leverage the new funds to boost product innovation, scale operations, and expand its team for efficiency.
CapGrid’s AI-powered platform and deep network of suppliers allow manufacturers to significantly reduce the complexities in the direct material sourcing & procurement process. These capabilities allow manufacturers to expedite the sourcing of the high complexity categories 5X and consolidate the supplier base for the low complexity precision components. CapGrid’s customers are able to complete the source-to-contract cycle for high complexity categories in 4-6 weeks. For the long tail of low complexity components, CapGrid replaces all of their suppliers and becomes the only source. CapGrid is currently serving the spectrum of industries across automotive, agricultural equipment, earthmoving equipment, aerospace, oil and gas, consumer durables, and electric vehicles (EVs). CapGrid currently works with over 30k suppliers across 15 countries and with several leading automotive OEMs.
CapGrid was founded in July 2020 by Dheeraj Kumar Tiwari and Himanshu Singh Raghuvanshi. Both founders are ex-management consultants, having worked with manufacturers/ OEMs across India, US and Japan for over a decade. Through their previous experiences of serving manufacturers & OEM’s, the founders saw a gap with manufacturers running complex direct material sourcing processes in a manual, long-drawn way. With frequent product launches and cost pressures, manufacturers currently fail to efficiently expedite the direct material sourcing and procurement process. CapGrid’s consolidation of the supplier base, AI-generated supplier insights, smart algorithms for supplier selection and enhanced sourcing lifecycle visibility are resonating with leading OEMs in their customer portfolio.
Speaking about the funding, Dheeraj Kumar Tiwari, Co-Founder & CEO, CapGrid said, “Strategic Sourcing of direct material, which constitutes 60-70% revenues, has been largely untouched by innovation. Most of the other start-ups have been focusing on the procurement of indirect spend. We are building a sourcing-focused company aiming to disrupt the sourcing and purchase cycle for the factory supplies. We have been bootstrapped so far and this seed capital will go into hiring the right talent, product innovation and expanding our fulfilment operations. We are eyeing an annual revenue of INR 200 cr by 2022 end and are certain to leapfrog from here. We have bagged a contract worth INR 50 Cr by way of new customer acquisition, these are exciting times for us and we are certain of exciting times ahead.”
Speaking on the investment in CapGrid, Ashvin Chadha, Co-founder, Anicut Angel Fund, said, “Manufacturing industry, especially the direct material sourcing, has long been underserved and CapGrid had a vision to commission the narrative. Dheeraj and Himanshu are transforming this by addressing industry pain-points such as long-drawn parts sourcing cycle, inefficient vendor development process, unorganized supplier information, and lack of sourcing data. We are totally convinced with their vision and mission and wish them all the very best in their journey.”
Nandan Venkatachalam, Principal at Axilor Ventures, said, “COGS or Directly Material Sourcing is the largest cost centre for manufacturers and has a supply chain riddled with inefficiencies. An average manufacturer goes through a 50-step process across stakeholders and works with over 1k suppliers to source direct material, with each layer acting as a cost centre. CapGrid’s new age platform allows manufacturers to automate this process, expand their global sourcing base, reduce costs and drive efficiency. The company has demonstrated global PMF across verticals and we are delighted to back them in their quest to streamline this largely untapped $ 75bn + opportunity.”
Kushal Bhagia, CEO at First Cheque, said, “We are truly excited by Dheeraj and Himanshu’s vision to simplify sourcing for Auto OEMs. Their SaaS solution coupled with the commerce offering gives a multitude of benefits to the OEMs- making CapGrid a no-brainer operator to work with.”
CENSIE Capital Partners was the exclusive financial advisor to CapGrid Solutions for this said investment round, Capgrid was a part of ‘StellarStory 1.0”- a program recently launched by CENSIE exclusively for seed-stage startups.