Companies across many industries are struggling to find a solution for balancing the supply-demand gap after COVID-19 has disrupted the entire manufacturing supply chain, including the semiconductor shortages.
CADDi is a Tokyo-based B2B order and supply platform for the manufacturing and procurement industries. It combines supply and demand by aggregating supply and demand.
Globis Capital Partners and World Innovation Lab (WiL) led the $73 million Series A round. Existing investors DCM, Global Brain and Global Brain also participated. The round also includes six new investors, including Arena Holdings and DST Global, Minerva Growth Partners (Tybourne Capital Management), Tybourne Capital Management, JAFCO Group, and SBI Investment.
CADDi was established by Yushiro Kato, CEO, and Aki Kobashi, CTO in November 2017.
Sources close to the deal estimate that the post-money value is $450 million.
CADDis total funding to date is $90.5 million. The company closed a Series A round of $9 million led by DCM, followed by Globis Capital Partners, WiL, and Global Brain.
The proceeds of the funding will be used to accelerate digital transformation, hire and expand into global markets.
Integrated production of complete equipment sets that include custom-made parts, such as machined parts, sheet metal and structural frames is possible with our company. Yushiro Kato, CEO, said that an automated quotation system, based on a proprietary cost calculation, selects the processing company that matches the order's quality, delivery date, and price and creates an optimal supply chain.
CADDis' ordering platform aims to transform the manufacturing sector from a pyramid-like structure with multiple subcontractors to a flat connected structure that is based on each manufacturer's strengths. This will allow those at the frontlines of manufacturing to spend more time on creative work. Kato stated.
CADDis' unique ordering platform is backed by its unique technology, including an automatic cost calculation system and optimal ordering and production system. It also offers a 10%-15% cost savings, stable capacity, and balanced order placement to more than 600 Japanese suppliers.
CADDis services have seen a significant increase in demand. Kato stated that our business has grown very quickly and that the company's latest orders have increased more than sixfold compared to the prior year. This led to Kato expanding the company's presence in both eastern and western Japan to meet the increase in demand.
Kato said that we will continue to expand our ordering platform and provide purchase orders (manufacturers), and supply partners with our technology to encourage digital transformation of their operations.
We are considering selling Drawing Management SaaS in the near future. This product was previously used internally to order CADDis orders. It will help customers eliminate operational pains associated with managing piles of drawings. Drawing Management SaaS technology can help you manage drawings as documents and allow you to use data from drawings for your future decisions.
Kato stated that CADDis next axis will be other emerging markets, particularly in Southeast Asia. Kato said that many of our Japanese customers have branches and subsidiaries in these countries. This is a natural expansion opportunity to us to increase our value proposition and offer more continuity and seamless services to our customers.
Kato stated that it will continue to invest in its platform CADDi, and new business, by hiring engineers. In the next three-years, it plans to hire 1,000 people. CADDi had 102 employees at March 2021.
Kato stated that the company plans to be a global platform, with sales of USD 9.1 million (that's 1 trillion YEN) by 2030.
COVID-19 had different impacts on different industries within the manufacturing and procurement sector. The automobile and machine-tool industries were adversely affected by the pandemic, and saw a temporary drop of up to 90% in sales. However, other industries like the medical and semiconductor have seen explosive growth in demand. According to Kato, COVID-19 has resulted in more demand for the company because CADDis system balances receipts across multiple industries.
Masaya Kubota is a partner at World Innovation Lab. She said that CADDis solution to aggregating supply and demand has again proven to be essential for both buyers and manufacturers. The pandemic infected the supply chain of manufacturing. CADDi was our first investment in 2018. We believed in their mission to digitally transform one of the most analog sectors, the $1 trillion procurement industry.
Kenichiro Hara (another investor principal at DCM) also stated in an email interview that the pandemic exposed the supply chain vulnerabilities of the manufacturing sector. If a country is in lockdown, or a factory is unable to operate, customers are unable to procure the necessary parts to make their products. The entire supply chain can be affected as a result. This is why CADDis primary value-add has increased the importance of finding new suppliers that are available and easily accessible.
