Starting a new venture is always a daunting experience especially when you need financial backers or seed investors to kick start your start-up journey. Before you go ahead with your operations, it is important to look for funding’s whether you pitch your start-up to angel investors, self-finance or apply for financial grants. To understand how to raise funds for your start-up, let us look into Zetwerk, a start-up that connects global companies with manufacturing facilities in India.
Zetwerk current scenario
Zetwerk raised $120 million in order to strengthen their technology and also to reach out to more clients. The funding round consisted of their existing investors including Lightspeed Venture Partners, Sequoia Capital India and Greenoaks Capital. This brings the total that Zetwerk has raised to $193 million according to a statement passed by them. The Bangalore-based start-up has tripled its sales in 2020 even as the pandemic hit the global supply chains industry.
How does Zetwerk work?
Zetwerk offers a technological platform and project-management for their customers who seek manufactures for everything including luxury apparels, electric equipment, etc. Their aim is to reduce or eradicate friction in the supply chain. They initially started with smaller trial order cycles. Today, they have reached a position where customers place large multimillion-dollar orders. Founded by four alumni of Indian Institute of Technology in 2018, the company sped up project management connecting over 2,000 small manufacturers with more than 250 global customers. They also connect their small manufacturers with suppliers, logistics providers and banks. When they began, they started with industrial goods and have now shifted to consumer goods with increase in demand for the same. The start-up plans to put in the fresh capital to improve and develop their technology and also expand into newer areas and categories.
What can you learn?
Zetwerk has carved its own path to success but there is a lot we can learn from them. There are reasons why they ended up attracting investors from across the world and scaled up. First, they started out with a distinct and unique idea of a global supply chain that connects various businesses with each other. They catered to both consumer and producer problems in an effective and efficient way and provided real value. This shows investors something unique they want to invest their money in as they see the potential of profits and growth. Second, they practised rapid scaling-up. They started with a few trial orders and then scaled it to a large-scale consumer-producer base. This shows investors you are committed to your venture and that you have the power to take it to a wider platform, instilling their confidence in your product. Last, Zetwerk diversified its operations across businesses, lowering the risk factor of investments. They are also looking for other sectors to expand to, brainstorm and know which products work and where and how they work. Your research and development should reflect in your pitch, this is something that will always catch the attention of investors.