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When you want to buy a refrigerator or a television, you can walk to the nearby electronics store or visit an e-commerce website like Amazon. But where do you go when you’re looking for parts of a crane, a door or chassis of different machines?
For several businesses globally, the answer to that question is increasingly Zetwerk, a Bangalore-based startup.
The three-year-old startup runs a business-to-business marketplace for manufacturing items that connects OEMs (original equipment manufacturers) and EPC (engineering procurement construction) customers with manufacturing small-businesses and enterprises.
All the products it sells today are custom-made. “Nobody has a stock of such inventories. You get the order, you find manufacturers and workshops that make them,” explained Amrit Acharya, co-founder and chief executive of Zetwerk, in an interview with TechCrunch.
Its customers — there are over 250 of them, up from 100 a year ago — operate across two-dozen industries (including process plants, oil & gas, steel, aerospace, medical devices, apparel and luxury goods) in the infrastructure space, and approach Zetwerk with digital designs they wish to be translated into physical products.
Customers aren’t alone in seeing value in Zetwerk. On Wednesday, the Indian startup said it has raised $120 million in a Series D financing round led by existing investors Greenoaks Capital and Lightspeed Venture Partners. Existing investors Sequoia Capital and Kae Capital also participated in the Series D round.
The new round, which brings Zetwerk’s to-date raise to $193 million, gives the firm a post-money valuation of somewhere between $600 million to $700 million, a person familiar with the matter told TechCrunch. (A quick side note: Zetwerk announced a $21 million Series C round last year, but ended up raising $31 million in that round.)
Zetwerk was co-founded by Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary. Long before Acharya and Ramakkrushnan joined forces to tackle this space, they had been contemplating this idea.
Both of them studied at IIT Madras, went to the same exchange program in Singapore, and were colleagues at Kolkata-headquartered conglomerate ITC. While working there, they realized that part of a product manager’s job at the firm was dealing with gazillions of suppliers and the manufacturing items they offered.
The process was archaic: There were no databases, and people couldn’t track shipments.
The early version of Zetwerk, which was a database of suppliers, was a direct response to this. But after listening to requests from customers, the startup saw a bigger opportunity and transformed itself into a full-fledged marketplace with integrations with third-party vendors. Once a firm has placed an order, Zetwerk allows them to keep tabs on the progress of manufacturing and then the shipping. There are also quality checks in place.
Zetwerk website
Zetwerk operates in such a unique space today — Shailesh Lakhani, managing director at Sequoia India, says the startup has defined a new category of marketplace — that by and large it’s not competing with any other firm in India — or South Asia. (The startup competes with domain project consultants in the offline world.)
The opportunity in India itself is gigantic. According to industry reports, manufacturing today accounts for 14% of India’s GDP. Vaibhav Agarwal, a partner at Lightspeed, estimates that the market is as large as $40 billion to $60 billion in India and global trade-tailwinds that creates opportunity to serve international demand.
As more and more companies expand or shift their manufacturing to India — in part due to import duties imposed by India and geo-political tension with China, the global hub for manufacturing — this opportunity has only grown bigger in recent years.
“India has a lot of depth in manufacturing, but much of it has not been tapped well,” said Acharya.
Zetwerk — which grew 3X last year and reported revenue of $43.9 million in the financial year that ended in March, a 20X growth from the year prior — plans to deploy the new capital to expand to more areas of categories, and broaden its technology stack. Consumer goods (which covers items such as mixer grinders and TVs) is an area Zetwerk expanded to last year, and said it accounts for 15% of the revenue it generated in the last six months.
Currently 25 of its customers are in the U.S., Canada, Europe and other international markets. Acharya said the startup plans to open offices overseas this year as it scouts for more international customers.
“We are excited to partner with Zetwerk on the next leg of their journey, as they expand their value proposition globally. Zetwerk’s operating system for manufacturing has digitized multiple supply chains end-to-end, ensuring on-time delivery and high quality standards. This has led to rapid growth in India and internationally, with the potential to quickly become one of the most important manufacturing platforms globally,” said Neil Shah, partner at Greenoaks Capital, in a statement.
BukuWarung, an Indonesian startup focused on digitizing the country’s 60 million small businesses, announced today it has raised new funding from Rocketship.vc and an Indonesian retail conglomerate.
The amount was undisclosed, but sources say it brings BukuWarung’s total funding so far to $20 million. The company’s last round, announced in September 2020, was between $10 million to $15 million. Launched in 2019, BukuWarung was founded by Chinmay Chauhan and Abhinay Peddisetty and took part in Y Combinator last year.
Indonesian fintech startup BukuWarung gets new funding to add financial services for small merchants
Rocketship.vc is also an investor in Indian startup Khatabook, which reached a valuation between $275 million to $300 million in its last funding round. Like Khatabook, BukuWarung helps small businesses, like neigborhood stores called warung, that previously relied on paper ledgers transition to digital bookkeeping and online payments. BukuWarung recently launched Tokoko, a Shopify-like tool that lets merchants create online stores through an app, and says Tokoko has been used by 500,000 merchants so far.
Chuahan, BukuWarung’s president, said it has started making revenue through its payments solution. In total, BukuWarung now claims more than 3.5 million registered merchants in 750 Indonesian towns and cities, and says it is recording over $15 billion worth of transactions across its platform and processing over $500 million in terms of volume.
SMEs contribute about 60% to Indonesia’s gross domestic product and employ 97% of its domestic workforce, but many have difficulty accessing financial services that can help them grow. By digitizing their financial records, companies like BukuWarung can make it easier for them to access lines of credit, working capital loans and other services. Other companies serving SMEs in Indonesia, Southeast Asia’s largest economy, include BukuKas and CrediBook.
BukuWarung will use its new funding to grow its tech and product teams in Indonesia, India and Singapore. It plans to launch more monetization products, including credit, and grow its payments solution this year.
The Bezos era is ending, Uber acquires Drizly and Tesla recalls 135,000 vehicles. This is your Daily Crunch for February 2, 2021.
The big story: Jeff Bezos will step down as Amazon CEO
Amazon announced today that founder Jeff Bezos will be transitioning from CEO to executive chair in the third quarter of this year. Andy Jassy, currently the CEO of Amazon Web Services, will be taking over as chief executive for the entire company.
In an email to employees, Bezos said that this will allow him to devote more time to “Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and [his] other passions.” Jassy, meanwhile, had previously been identified as a likely successor.
The tech giants
Uber is buying alcohol delivery service Drizly for $1.1B — The plan is to build Drizly’s marketplace directly into the Uber Eats app, though Uber says it will maintain Drizly as a standalone app as well.
Tesla recalls 135,000 vehicles over touchscreen failures — According to the National Highway Traffic Safety Administration, the touchscreen in Model S and Model X vehicles can fail when a memory chip runs out of storage capacity.
Amazon to pay $61.7M to settle FTC complaint over stolen Amazon Flex driver tips — According to the complaint against Amazon and its subsidiary Amazon Logistics, the company had advertised that it paid 100% of tips to drivers, but in reality, Amazon used the customer tips to cover the difference after it lowered the hourly rate.
Startups, funding and venture capital
Divvy Homes secures $110M Series C to help renters become homeowners — Over the course of 2020, Divvy expanded operations from eight to 16 total markets and financed five times as many homes as it had in pre-pandemic times.
Kindred Ventures just closed its second fund with $100M in capital commitments — Kindred is a San Francisco-based pre-seed and seed-stage venture fund founded by Steve Jang and Kanyi Maqubela.
Omnispace raises $60M to fuse satellites and 5G into one ubiquitous network — Omnispace wants to offer ubiquitous 5G-compliant connectivity for enterprise users using a hybrid of wireless ground technology and satellites.
Advice and analysis from Extra Crunch
Udemy’s new president discusses the reskilling company’s future — “We blew through $100M ARR.”
The future of SaaS is on-demand: Use experts to drive growth and engagement — For SaaS companies, not having a gig economy strategy as we start 2021 is like missing the internet trend in 1990.
Save 25% with Extra Crunch Group Membership — This new feature allows you to easily manage seats and payments for your team through a self-service interface.
(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Everything else
Eight Miami-area investors assess America’s southernmost tech ecosystem — We’re seeing a “moment” in Miami, but many are hoping to turn it into a movement.
Welcome Tage Kene-Okafor, Mary Ann Azevedo, Sophie Burkholder and a guy named Drew — Hooray for new team members!
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
Source: https://techcrunch.com/2021/02/02/daily-crunch-jeff-bezos-will-step-down-as-amazon-ceo/
Blockbuster news struck late this afternoon when Amazon announced that Jeff Bezos would be stepping back as CEO of Amazon, the company he built from a business in his garage to worldwide behemoth. As he takes on the role of executive chairman, his replacement will be none other than AWS CEO Andy Jassy.
With Jassy moving into his new role at the company, the immediate question is who replaces him to run AWS. Let the games begin. Among the names being tossed about in the rumor mill are Peter DeSantis, vice president of global infrastructure at AWS and Matt Garman, who is vice president of sales and marketing. Both are members of Bezos’ elite executive team known as the S-team and either would make sense as Jassy’s successor. Nobody knows for sure though, and it could be any number of people inside the organization, or even someone from outside. Amazon was not ready to comment on a successor yet with the hand-off still months away.
Holger Mueller, a senior analyst at Constellation Research, says that Jassy is being rewarded for doing a stellar job raising AWS from a tiny side business to one on a $50 billion run rate. “On the finance side it makes sense to appoint an executive who intimately knows Amazon’s most profitable business, that operates in more competitive markets. [Appointing Jassy] ensures that the new Amazon CEO does not break the ‘golden goose’,” Mueller told me.
Alex Smith, VP of channels, who covers the cloud infrastructure market at analyst firm Canalys, says the writing has been on the wall that a transition was in the works. “This move has been coming for some time. Jassy is the second most public-facing figure at Amazon and has lead one of its most successful business units. Bezos can go out on a high and focus on his many other ventures,” Smith said.
Smith adds that this move should enhance AWS’s place in the organization. “I think this is more of an AWS gain, in terms of its increasing strategic importance to Amazon going forward, rather than loss in terms of losing Andy as direct lead. I expect he’ll remain close to that organization.”
Ed Anderson, a Gartner analyst also sees Jassy as the obvious choice to take over for Bezos. “Amazon is a company driven by technology innovation, something Andy has been doing at AWS for many years now. Also, it’s worth noting that Andy Jassy has an impressive track record of building and running a very large business. Under Andy’s leadership, AWS has grown to be one of the biggest technology companies in the world and one of the most impactful in defining what the future of computing will be,” Anderson said.
In the company earnings report released today, AWS came in at $12.74 billion for the quarter up 28% YoY from $9.6 billion a year ago. That puts the company on an elite $50 billion run rate. No other cloud infrastructure vendor, even the mighty Microsoft, is even close in this category. Microsoft stands at around 20% marketshare compared to AWS’s approximately 33% market share.
It’s unclear what impact the executive shuffle will have on the company at large or AWS in particular. In some ways it feels like when Larry Ellison stepped down as CEO of Oracle in 2014 to take on the exact same executive chairman role. While Safra Catz and Mark Hurd took over at co-CEOs in that situation, Ellison has remained intimately involved with the company he helped found. It’s reasonable to assume that Bezos will do the same.
With Jassy, the company is getting a man who has risen through the ranks since joining the company in 1997 after getting an undergraduate degree and an MBA from Harvard. In 2002 he became VP/technical assistant, working directly under Bezos. It was in this role that he began to see the need for a set of common web services for Amazon developers to use. This idea grew into AWS and Jassy became a VP at the fledgling division working his way up until he was appointed CEO in 2016.
Source: https://techcrunch.com/2021/02/02/what-andy-jassys-promotion-to-amazon-ceo-could-mean-for-aws/
Google continues to bet heavily on Google Cloud and while it is seeing accelerated revenue growth, its losses are also increasing. For the first time today, Google disclosed operating income/loss for its Google Cloud business unit in its quarterly earnings today. Google Cloud lost $5.6 billion in Google’s fiscal year 2020, which ended December 31. That’s on $13 billion of revenue.
While this may look a bit dire at first glance (cloud computing should be pretty profitable, after all), there’s different ways of looking at this. On the one hand, losses are mounting, up from $4.3 billion in 2018 and $4.6 billion in 2019, but revenue is also seeing strong growth, up from $5.8 billion in 2018 and $8.9 billion in 2019. What we’re seeing here, more than anything else, is Google investing heavily in its cloud business.
Google’s Cloud unit, led by its CEO Thomas Kurian, includes all of its cloud infrastructure and platform services, as well as Google Workspace (which you probably still refer to as G Suite). And that’s exactly where Google is making a lot of investments right now. Data centers, after all, don’t come cheap and Google Cloud launched four new regions in 2020 and started work on others. That’s on top of its investment in its core services and a number of acquisitions.
“On cloud, we see how early customers are in this shift,” Google/Alphabet CEO Sundar Pichai said in today’s earnings call. “We see a large time ahead — and definitely the market dynamics and our momentum in the context of the market is the framework in which we are thinking about the scale of investments — and the pace of investments. Obviously, it’s an area in which the longer you are in, the [unintelligible] and contributes more — and economies of scale start working as well. But we are definitely investing ahead to make sure we are able to be able to serve the customers globally across all the offerings they are interested in.”
Image Credits: Google
“Our strong fourth quarter performance, with revenues of $56.9 billion, was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year,” Ruth Porat, CFO of Google and Alphabet, said. “Google Cloud revenues were $13.1 billion for 2020, with significant ongoing momentum, and we remain focused on delivering value across the growth opportunities we see.”
In today’s earnings call, Porat noted that Workspace is seeing strong growth among large enterprises, “which are signing meaningful, long-term commitment agreements.”
For now, though, Google’s core business, which saw a strong rebound in its advertising business in the last quarter, is subsidizing its cloud expansion.
Meanwhile, over in Seattle, AWS today reported revenue of $12.74 billion in the last quarter alone and operating income of $3.56 billion. For 2020, AWS’s operating income was $13.5 billion.
Source: https://techcrunch.com/2021/02/02/google-cloud-lost-5-6b-in-2020/
