Fractory, the Estonian Startup Tech Business Focused on Manufacturing, Raised 4.8 Million Euros With the Help of Strategic Investors
The additional capital is used for expansion in existing markets, mainly in the United Kingdom and Scandinavia. The main focus is on increasing the offered production capacity and volume in order to strengthen existing customer relationships and increase the value proposition to the growing customer base.
Fractory started in 2017 on the Estonian market and has at least doubled its turnover year after year, and in many ways through large customers. “This year we received our first order, which was over 2 million euros. While we were initially approached because of the platform’s automation, speed and convenience, more and more customers are looking for quality and delivery reliability through our network of partners. They do not need to validate or audit production partners themselves, as we take this responsibility for them. The new investment will help us in growing exactly this type of customers, in order to serve them faster, more efficiently and more comprehensively,” explained co-founder and CEO of Fractory, Martin Vares.
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.
Martin Vares explains: “Kvanted understands exactly what we are doing. 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 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.”
Fractory has been trading since 2017 and was founded by mechanical engineer-turned-entrepreneur Martin Vares along with Joosep Merelaht and Rein Torm. Company is connecting engineers with production capacity. Customers use this Fractory for series manufacturing, project manufacturing and prototyping. Fractory operates mainly in Scandinavia and the United Kingdom. The company employs 64 people, and the turnover in 2022 was nearly 15 million euros.