It took just four years for Zetwerk Manufacturing Businesses to notch up a valuation of $2.7 billion. And it did that by being a marketplace for contract manufacturing. The startup helps companies find small manufacturers for everything from fabricated structures and apparel to components for defence equipment and rail-wagon parts.
But it no longer wants to be just an intermediary.
In a small but significant shift in its strategy—bolstered by the Indian government’s localisation push—a unit of Zetwerk in May started a factory in the northern city of Noida to make wearables and IoT IoT Internet of Things The Internet of things describes physical objects with sensors, processing ability, software, and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks. devices.
The following month, the Sequoia- and Accel-backed startup bought a majority stake in Pinaka Aerospace Solutions and Sharp Tanks & Structurals. The former is a 15-year-old supplier to the armed forces and the Defence Research and Development Organisation (DRDO), while the latter is a provider of storage vessels to oil-and-gas companies.
Zetwerk reportedly spent
Rs 100 crore
Rs 100 crore
Zetwork acquires 3 firms for ₹100 crore to strengthen industrial business
(nearly US$ 13 million) in cash on these deals, along with an October 2021 purchase of a fabrication unit of Wheels India, an auto parts maker from the TVS Group. The quantum of purchase consideration is also interesting since Pinaka and Sharp Tanks were both profitable and generated revenues of Rs 17.3 crore and Rs 127 crore, respectively, during the year ended March 2021.
The company plans plans Livemint Zetwerk acquires 3 firms for ₹100 cr to strengthen industrial business Read more to “add more homegrown companies” to its portfolio.
“Even as a marketplace, you have to be physically present at the supplier’s location to ensure the order is executed. You are also supplying raw materials to them,” says the co-founder of another business-to-buisness (B2B) startup. “When you are already doing this, it’s a natural extension for you to have your own capacity.” The co-founder requested anonymity since they did not want to be seen commenting on a rival.
With India pushing to localise production across a range of sectors with the production-linked incentive (PLI) scheme (PLI) scheme Times of India India's PLI scheme has potential to add 4% to GDP annually: Report Read more , it’s not all that surprising that Zetwerk wants to be more entrenched in manufacturing, even if it is marketplace-first.