During her years at IIT Bombay as an aerospace engineering student, Sonam Motwani was involved in making electric race cars that participated in Formula Students UK, a contest popular among IIT students. It was then that she had her first encounter with the manufacturing industry and found that most manufacturers seldom adhered to their committed timelines. Later during her tenure at P&G, she again came across the same problem. In addition, she also found there was general resistance among manufacturers to take up small volume orders. This gave a tough time to hardware start-ups as well as new product development teams who struggled to get their prototypes and test samples done.
So with an aim to address this she launched Karkhana in June 2018. Karkhana is an online manufacturing platform which aggregates manufacturing suppliers and matches them to customers. “The platform helps in sourcing suppliers and provides transparent pricing. As we work on large number of small volume products we get economy of scale too,” notes Motwani. Conventionally the entire exercise of hardware development teams trying to find out suitable manufacturers, sending their requirements to different manufacturers, waiting for the quotation and then deciding whom to go ahead with after negotiations, takes about 3-4 weeks.
Karkhana, having a network of established suppliers for different processes, removes these hassles for clients through its one-stop platform. “For certain processes we are able to get back on the same day and for others maximum it takes 3 to 4 days,” says Motwani. Karkhana focuses on businesses which need to build around 1,000-2,000 units and not on mass manufacturing as Motwani feels that is where the gap lies. The platform currently has 36 suppliers on it. “We have pre-negotiated rates with them as we help utilise their unutilised capacity and make their operations more efficient,” reveals Motwani.
The start-up focuses on those industries where new product development is happening such as IoT devices for industrial purposes and consumer use which includes products for home improvement, personal products, healthcare devices, medical instruments and so on. In terms of manufacturing technologies it works on CNC machining, 3D printing, vacuum casting and sheet metal fabrication.
The average order value ranges between 50,000 and 150,000 and Karkhana draws a margin of 8 to 25% depending on the volume of the order. Lower the volume, higher the markup. The team has so far worked with around 45 businesses on about 350 products and currently makes monthly revenue of about 500,000. Having invested about 1.4 million in the business till date, she is currently in talks with investors to raise funds.
The team also has overseas expansion plans and is currently in talks with potential partners in Singapore and the US. While Motwani sees no local competition in the online manufacturing services aggregation space she admits there are a few companies in the US that could be a challenge. However, she believes Karkhana’s winning point is the cheaper price that it would be able to offer through the Indian supply chain.