Indian Unicorns 2022: Zetwerk Brings eCommerce to Manufacturers

India’s manufacturing segment accounted for 17% of its GDP last year. While it is a big market, it still remains a highly untapped and fragmented one. India’s Unicorn entrant Zetwerk is leading the process of bringing eCommerce to this sector, and it appears to be successful.

Zetwerk’s Offerings

Founded in 2018 by Amrit df Acharya, Rahul Sharma, Srinath Ramakkrushnan, and Vishal Chaudhary, Bengaluru-based Zetwerk connects original equipment manufacturers (OEMs) and engineering procurement constructions (EPC) customers with manufacturing small-businesses and enterprises. Acharya and Ramakkrushnan are both IIT Madras graduates who were also colleagues at Kolkata-headquartered ITC. While working there, they realized that product managers had to deal with a vast array of suppliers and the manufacturing items that these suppliers offered. The process of tracking these suppliers, and their products, was obsolete – there were no databases, and shipment tracking was lacking as well.

To help address this issue, they set up Zetwerk. Initially, Zetwerk was set up as a database of suppliers. But the founders kept their ears to the ground and paid attention to their customers. They saw that a bigger opportunity lay in providing a full-fledged marketplace that was well integrated with third-party vendors.

Soon, unlike traditional e-commerce companies, Zetwerk became focused on the fabrication, machining, casting and forging businesses. It sells goods such as parts of cranes, doors, and chassis of different machinery. Most of the products that Zetwerk deals in are custom-made and not normally ready inventory. Zetwerk indexes the small workshops it works with to understand details about the products that they have previously built. The indexing helps the bigger companies discover these smaller businesses and work with them. Customers can also approach these smaller firms with digital designs that they wish to be manufactured into physical products. Zetwerk’s solution allows the bigger firms to track the progress of the manufacturing and the shipping of the product.

Zetwerk’s process has helped the smaller businesses find a marketplace not only within India but overseas as well. Products made by these companies are now being exported to North America and Southeast Asia. Zetwerk’s founders believe that India’s manufacturing capability has not been tapped well so far, and its platform is helping bridge that awareness.

Zetwerk’s platform has helped attract over 250 customers with over 25 of them in US, Canada, Europe, and other international markets. It currently operates across two-dozen industries including process plants, oil & gas, steel, aerospace, medical devices, apparel, and luxury goods. It expanded into the consumer goods category in 2020 and already sees nearly 15% of its revenues come from this sector.

Zetwerk’s Financials

The high growth in its offerings has also translated to significant growth in revenues. For the financial year ended March 2021, Zetwerk saw revenues grow three times to INR 949 crores (~$127.5 million). Losses fell from 8% in FY20 to 2% in FY21.

The company has raised $649.9 million in 11 rounds of funding led by D1 Capital Partners, IIFL Finance, Greenoaks, ICONIQ Capital, Steadview Capital, TradeCred, Ritesh Agarwal, Sequoia Capital India, and Cem Garih. Its most recent round was held in December 2021, where it raised $210 million and was valued at $1.33 billion. A round held in February last year had valued it at $600-$700 million. Zetwerk plans to use the newly acquired funds to improve its technology stack and expand in international markets.  

According to analysts, Zetwerk’s market opportunity in India alone is as large as $40-$60 billion. Add the international market to the mix, and its market opportunity is limitless. While China has remained the giant in the manufacturing world, the recent geopolitical tensions in the region have helped divert some of the manufacturing interest to India. Zetwerk surely has a big market opportunity that it can address.

Photo Credit: Capri23auto from Pixabay

This segment is a part in the series : Indian Unicorns 2022