Custom manufacturing platform Karkhana.io has raised $6.3 million in a Series A funding round led by Arkam Ventures and Susquehanna Asia Venture Capital. Vertex Ventures Southeast Asia and India, an existing investor, also participated in the round.

The new funding will be deployed for the expansion of its supplier base, establish a robust electronics supply chain, and drive scaling efforts in the US and Europe.

India’s manufacturing sector is expected to be worth $1 trillion by 2025-26, and contribution from MSMEs will be pivotal in achieving this lofty goal. Factors such as competitive pricing, extensive labour pools, rising domestic demand and geopolitical considerations such as the China plus one strategy place India as a manufacturing destination for the world.

“This funding extends beyond growing our platform; it’s a dedication to fortifying India’s MSME ecosystem. We want to create a significant impact in sectors with expansive growth potential, addressing surging demand and propelling Karkhana.io to redefine the landscape of the Indian manufacturing industry,” said Sonam Motwani, Founder and CEO, Karkhana.io

Karkhana.io’s tech-enabled platform will provide sourcing and contract manufacturing solutions to OEMs and tech companies, through its manufacturing MSMEs network in India. The firm works with OEMs across product categories like EVs, medical equipment, consumer electronics, aerospace and others, helping them with a custom range of manufacturing solutions from small batch to mass production.

The platform currently has a supplier network of over 400 MSMEs enabling 90 OEMs for their contract manufacturing requirements. In the next 3 years, the company’s aims to empower over 3000 MSME suppliers.

“India’s manufacturing MSMEs account for 45 per cent of industrial output and 40 per cent of all exports. While there is a surge in domestic and international demand from OEMs, most small suppliers are poorly equipped to tap into new order flows, market their capabilities and find ways to maximise their capacity utilisation. We were attracted to a strong Karkhana.io team that provides a differentiated technology platform addressing these challenges while enabling a much-needed layer of trust, efficiency, and quality,” said Bala Srinivasa, Managing Director, Arkam Ventures.

Founded in 2018, Karkhana.io’s platform provides flexible and scalable solutions for contract manufacturing for a range of product categories, from small scale to large volume, product assembly to product localisation. Their solution addresses the lack of standardisation and transparency in procurement processes.

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