Tokyo-based Catallaxy, the company behind a B2B platform for metalworking called Mitsuri, announced on Monday that it has secured about 410 million yen ($3.8 million US) in a Series A round. Participating investors are Incubate Fund, SMBC Venture Capital, Future Venture Capital (TSE:8462), Nagase & Co (TSE:8012), Pavilion Capital (a private equity fund under Temasek Holdings, a Singaporean sovereign investment firm), and unnamed angel investors.
This follows the company’s pre-series A round back in March of last year when they raised about 325 million yen (about $3 million). Among the latest round’s investors, Incubate Fund and SMBC Venture Capital also participated in the pre-series A round.
Catallaxy was founded in 2015 by Hiroaki Oishi, a former employee at Kingsoft working for Chinese tech giant Qihoo 360. He launched the Fabit manufacturing industry-focused media website and the Mitsuri B2B platform for metalworking in 2018 followed by helping his family’s construction company create their website. Since the construction company has a function as a trading company for metal parts, Oishi had many opportunities to come into contact with metalworking craftspersons.
In addition to manual bending and cutting, NC machine tools are often used in the metalworking industry. These tools are required to input numerical information on the order of tools and the work processes required for processing so that craftspersons can automate dangerous machining and improve safety and operational efficiency. However, the fact is not many craftsmen are actually able to fully use these tools, which reminded Oishi of the need for software in the industry and led him to develop the Mitsuri platform.
When major brands need one-of-a-kind items (parts for prototypes, or parts for non-mass-produced machines), they often place orders with small metalworking factories. 300 metalworking companies, accounting 1% of all the 30,000 companies in Japan, are using the Mitsuri platform where these small companies can receive order and quotation requests. For brands, it is an easy way to obtain quotes from factories that match their processing needs, and for metalworking companies, it is an advantage to obtain accurate requests for more precised quotations and processing orders.
On the platform, metalworking companies are rated on a five-point scale based on quality, delivery time, price, and service. A company will be kicked out from the platform if they keep receiving a low rating under a certain level. If a brand has no drawing of what to be ordered, Catallaxy can help design it. The platform also acts as an escrow / middleperson between brands and metalworking companies, which helps eliminate the anxiety even if it is the first deal for both sides.
Catallaxy currently has 22 employees, and the orders dealt on the platform exceeded worth 3 billion yen (about $27.7 million) in 2019 while the number of companies placing orders hitting 10,000 (as of September 2020). The company plans to use the funds to further develop its software for both upstream and downstream processes in the metalworking industry. Joining Pavilion Capital as an investor suggests that the company also hopes to build a presence in Southeast Asia where we can see a similarly high demand in the metalworking industry.
