Martin Vares, Fractory CEO
, the manufacturing technology company, has announced a new £4.2 million funding round led by a brand-new early-stage investment company, Kvanted
, whose focus is on companies building industrial technologies in Northern Europe.
The increased capital will be used to expand Fractory in markets and territories where the company already operates, and where foundations are well-established, especially the UK. Specifically, Fractory aims to become an irreplaceable partner for its growing client base, achieving this by increasing the capabilities it offers and the capacities it handles.
Fractory started in 2017 in the Estonian market and has at least doubled its turnover yeach year since. It employs 70 people and is now headquartered in Manchester, and this year The FT
ranked it 32nd in its list of Europe’s 1,000 fastest-growing companies.
Fractory’s CEO Martin Vares said: “This year we received our first order of more than £2 million. In the beginning, orders were smaller and customers appreciated us mostly for our platform’s automation, speed and convenience. But more customers now also recognise our network of supply partners and the quality and delivery reliability they represent. The new investment will help us grow with exactly this type of customer as we expand our network of quality-assured partners and simplify supply chains for customers.”
Mr Vares said: “Kvanted understands exactly what we are doing. It has a longer-than-average investment period to align with the lengthier development cycles in industrial tech, and it acts as a connector, in our case bringing innovative technology providers together with traditional industrial companies. Kvanted has broad industry experience and unique networks, and its fund investors include prominent industrial players such as Oras Invest. It is the best possible strategic partnership for Fractory at this stage.”Untapped potential
Kvanted’s founding partner Axel Ahlström said: “There is 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 start ups, 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.”
Kvanted is a just-launched early-stage investor, having raised its first fund of 70 million euros and Fractory is its first investment. 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 — among them Superhero Capital, OTB Ventures, Trind Ventures, United Angels VC, Startup Wise Guys and Verve Ventures.
Mr Vares continued: “That existing investors are increasing their interest is a sign of approval. Venture capitalists, 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 very special.”
Jakob Storå, a partner at Finland-based Superhero Capital, said: “Superhero participated in Fractory’s first investment round back in 2019. As we have been able to witness Fractory’s progress close up and see its great potential, we are happy to support the company in this round as well. Fractory is building a connected manufacturing ecosystem that has the potential to revolutionise manufacturing procurement and we are excited to be part of the next step on this journey. We are also happy that Kvanted joins us as an investor in this round. With its industry expertise and connections, Kvanted can help Fractory’s solution get an even stronger foothold in the market.”