Exclusive: Zetwerk raises $21 Mn Series C round at $243 Mn valuation

Business-to-business marketplace for custom manufacturing, Zetwerk, has secured Rs 156.4 crore ($20.8 million) in a Series C funding round led by its existing backers, Greenoaks Capital and Accel Partners.

The financing round also witnessed the participation of Mauritius-based Kalysta Capital Fund, Subhsiah Vellayan, A. Venkatachalam along with other existing investors, Kae Capital, Sequoia Capital, and Lightspeed Partners.

Zetwerk connects buyers and suppliers for manufacturing jobs. It partners with offline suppliers who are engaged in fabrication, machining, casting, forging, and galvanizing of machine parts. Operational in over 15 countries, it claims to serve over 100 customers across 25 industries in India, North America, Middle-East and South-East Asia.

The Bengaluru-based company has made an allotment of 30,050 Series C compulsorily convertible preference shares (CCPS)  for Rs 52,044.88 per share to the above-mentioned investors, shows regulatory filings.

Greenoaks has led the funding tranche by putting in Rs 90.66 crore, followed by Accel with an investment of Rs 30.26 crore while Lightspeed and Sequoia have also infused Rs 15.86 crore and Rs 11.33 crore respectively. 

Kae Capital invested Rs 5.67 crore whereas Kalysta Capital Fund has put in Rs 1.89 crore. Vellayan and Venkatachalam have infused Rs 38 lakh each.

As per Fintrackr estimates, the company will be valued around Rs 1,820 crore ($242.6 million) after Series C financing. 

The fresh funding round for Zetwerk has materialized within six months of its $32 million worth Series B financing. In January this year, it had also secured Rs 16 crore debt from Innoven Capital. So far, the platform has managed to secure over Rs 471.44 crore ($62.8 million) across four financing rounds. 

Post Series C financing, Sequoia will remain the biggest shareholder in Zetwerk with a 16.87% stake. Accel will hold a 14.78% stake while co-founders- Amrit Acharya and Srinath Ramakkrushnan will retain 14.13% stake each. 

Kae Capital Fund will command an 8.7% stake. Greenoaks and Kalysta Capital will have 11.14% and 2.9%stake in the company. The ESOP fund of the company consists of an 8.69% stake. Other angel investors include BlackBuck’s co-founder Rajesh Yabaji and Sanjeev Rangrass who lead the Agri Businesses for ITC Limited. Both were early-stage backers in Zetwerk’s Seed and Series A round and hold a nominal stake in the company. 

While financial statements for FY20 have been delayed due to disruptions caused by the Covid-19 pandemic, figures for FY19 are out. The two-year-old company recorded operating revenue of nearly Rs 16 crore during its first full year of operations in FY19.

During the same period, Zetwerk’s total expenditure stood at Rs 20.93 crore out of which around 70% was spent on the purchase of stock in trade for the B2B procurement platform. Its net cash outflow from operations stood at Rs 14.92 crore and the company lost Rs 4.48 crore during the fiscal ended in March 2019.