Cofactr provides warehousing and procurement for electronics manufacturers. A $6 million round of seed funding was raised by the company. A SAFE note has a $25 million cap. We learned more about the company's vision of the future from the team.
Pre-manufacturing, third-party logistics and supply chain automation are some of the challenges addressed by Cofactr. By providing these products as a unified strategic solution, the goal is to enable hardware manufacturers to get to production volume without investing in specialized facilities.
The desire to solve problems is what drives Phil and I. Prior to Cofactr, we were working on the engineering and solutions side of hardware with our previous company, Be Side Digital, starting off in the entertainment industry and growing to support companies like Zoox, Google and CrowdStrike across product and custom hardware for marketing. Building and scaling hardware felt incredibly laborious in comparison to software, which was a challenge we had to face. The most personal problem we could address was the electronic supply chain.
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I was told by the company that the journey to Cofactr wasn't linear. The company originally built and ran a contract manufacturer for circuit board assembly, but realized that wasn't the right context to tackle these problems. The company built electronics-specific third-party logistics.
When technology bridges gaps between ideas and scale, it's easy to do. Cofactr was born out of that idea. When we were on the engineering side of the table, it was the company we wanted to work for.
Matthew and Phil are co-founding members of Cofactr. In a new window, the image is called Cofactr.
The investment round was led by Bain Capital.
Bain Capital is one of the big players on the table. We were helped by YC to find and provide the things that people really loved about Cofactr and were set up to meet the man, who immediately felt like a match. The opportunities that can come out of a business that integrates hardware, logistics and software into a single solution, as well as the challenges that come with building in many areas simultaneously, were understood by the BCV team.
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The investors see a future where the Cofactr team can make a difference.
The Cofactr founders were very knowledgeable about the challenges of electronic component procurement. We have never seen anything like this before. It combines cloud procurement software, a network of suppliers and a turn-key Logistics platform that handles shipping, customs management, counterfeit insurance, inventory, kitting and shipping management. Hardware manufacturers can use the Cofactr platform to find electronic components, check pricing, order parts, handle replenishment and send parts to their partners. The acquisition of the parts, storage and management of the inventory, control checks, and regular shipments of components to manufacturers are all handled by Cofactr.
The focus of BCV seems to be on the supply chain. The investor backed companies such as Kiva Systems, FourKites, and TruckSmarter. It made an investment in Flux last year.
The supply chain was exposed to a lot of cracks during the Pandemic. Ford warned its investors that it had to eat an additional $1 billion of costs in Q3 this year due to supply chain challenges and GM saw a 40% drop in profits in the second quarter. The fertile ground in which supply chain startup get to sow their opportunities is out there.
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It was hard to get electronic components. Hardware companies have a lot of challenges to contend with. There is an opportunity to create a vertically integrated software andlogistics solution in a few industries. The example of this is ShipBob, a mid-market e-commerce brand. A complete software-and-logistics solution for hardware manufacturers is what Cofactr is doing.
Cofactr's ultimate goal is to make hardware that isn't hard.
There is a lot of startup attacking the hardware engineering space, but we all have to work in the same way that software development tools do. There will be more collaboration between Cofactr, other startup and organizations that serve hardware. A few years ago, we saw Cofactr as the cloud solution for pre-manufacturing infrastructure. The vision we have is similar to the hardware manufacturing version of Amazon Web Services. Without infrastructure investments, companies can take a software product and scale it up. In a decade, the same will be true for building hardware products and we believe that Cofactr will be a key part of that transformation.
The US wants to build a more reliable and resilient on-shore manufacturing capacity. There has been a lot of investment in electronics manufacturing in the past year due to the CHIPS act. Makersite raised 18 million and Altana raised 100 million.
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