Katana, an enterprise resource planning (ERP) platform for small and medium-sized manufacturers, has raised 35 million euros ($34 million) in a Series B funding round.
ERP is a form of business management software that can serve any number of functions within a company, from marketing and risk management, to supply chain management and beyond. Integrations are crucial to any ERP software, as they typically involve pulling data from different systems such as HR, CRM, accounting and order management to create insights and analytics — at its core, ERP is about identifying potential problems and improving efficiency.
Founded out of Tallinn, Estonia in 2017, Katana is an ERP for the manufacturing sector, with pre-built integrations for many of the most common tools a manufacturer might use, including e-commerce platforms (e.g. Shopify and WooCommerce), accounting (eg QuickBooks and Xero), shipping, forecasting, CRM and more. Collectively, these various integrations can help a manufacturer predict what their future inventory needs will be based on historical or real-time sales data, for example, to ensure they don’t run out of stock or parts.
End of the “made in China” era.
A big driver behind the demand for such software is direct-to-consumer (D2C) manufacturing, which has led smaller, local manufacturers — or “micro-manufacturers” — to cut out many of the middlemen traditionally necessary to production of their products.
“The rise of D2C manufacturing has led to a bit of a manufacturing renaissance, giving consumers a wealth of choices that reduce the power of mass-produced brands,” Katana co-founder and CEO Kristjan Vilosius explained to TechCrunch. “As manufacturing moves closer to the increasingly conscious consumer, brands that rely on local production and inventory are gaining market share. In short, the era of “made in China” is coming to an end.”
This has been aided by modern technologies such as 3D printing and computer-aided laser cutters, allowing companies to produce products on a smaller scale away from centralized mass-production factories. At the same time, the emergence of online shopping, e-commerce software, and the broader cloud computing movement has made it easier to control the entire business process, from manufacturing to sales.
“Manufacturers already have a technology stack of tools such as e-commerce platforms, shipping tools and accounting software,” Vilosius continued. “What’s missing is a central source of truth that streamlines the flow of information and minimizes manual data entry and, consequently, human error.”
Legacy ERP software from the likes of Netsuite and SAP is typically geared towards larger enterprises, so we’ve seen a slew of younger upstarts enter the fray with much VC fanfare in recent years, with Katana and its ilk trying to launch a more modern toolset specifically designed for SMBs — specifically in Katana’s case, SMB manufacturers.
“Supporting this new wave of manufacturers is critical – business suites like NetSuite and SAP have a heavy cost and a wealth of features and functions that exceed the needs of SMBs,” Vilosius said. “The ERP space is also known for poor user experience and user interface and low customer satisfaction. Many small businesses choose spreadsheets despite the fact that they are prone to errors and difficult to scale as their businesses grow.”
Katana had previously raised about $16 million, most of which came through its Series A round last year, and in the intervening months the company claims to have quadrupled its annual recurring revenue (ARR), grown its staff from 30 to 140 and scaled Its customer base from “hundreds of small businesses to thousands of customers in the SMB segment,” according to Vilosius. In addition, the company launched an open API for customers to build their own integrations.
With another $34 million in the bank, the company said it is well-funded to “bring manufacturing software into the digital age,” which will include developing “more advanced accounting integrations.”