KFactory is a scaleup that quickly became the market leader for solutions that are increasing operational efficiency in manufacturing from Romania and we’re proud to have them in our portfolio. The combination between their vast experience and state-of-the-art technology make it exactly the kind of start-up we want to work with, so they can benefit the most from our Smart Founder – Smart Money – Smart Investor approach.
Read on to find out how KFactory is changing one of the oldest industries into the 21st century using newest technology, and how choosing smart money helped them expand in a new foreign market in less than 6 months.
What is KFactory and what is the mission of its two highly experienced founders?
The manufacturing industry is constantly changing and evolving. Being at the core of our lives and evolution as a society it is natural that we’re trying to improve it. The latest technologies and processes and ways of thinking are applied in order to produce more in less time and with less money.
And the history is there to prove it – from the first industrial revolution, when the first attempts of mass production were made possible by water and steam to the fourth industrial revolution that we see today, when AI, IoT and 3D printing allow for cyber-physical systems to function autonomously with as little human interference as possible.
But there’s still a long way to go. Yes, Industry 4.0 is the latest buzz in manufacturing – the possibilities make it so appealing and everyone wants to transform. But it’s not that easy. In the race for digitalization, many are left behind. Some don’t have the budget or the expertise. And while some have a bit of both, they still fail.
The numbers show it too. Of course there are some big percentages, but they’re only showing the intention of adopting digital transformation. When it comes to implementation and results, the reality is different. As one of the KFactory founders told us:
“Although we hear a lot of noise on this topic, in reality only a maximum of 20% of production companies are truly digitalized. WORLDWIDE.”
And you bet they know what they’re talking about. With a vast experience of over 20 years in multiple fields, they are the founders that the manufacturing industry needed. They are not your average unexperienced naive start-up founder.
Adrian Dima is an expert in digital transformation strategies, software architecture and new technologies in manufacturing. With 4 years of experience in this manufacturing and over 20 in enterprise IT, he deployed hundreds of products and projects for big and small customers. Since 2019, he’s representing KFactory in Portugal and is dedicating his free time to writing and speaking about digital transformation and IT projects lifecycle.
Vlad Cazan has worked for more than 15 years in enterprise software sales, business development and implementation. He had multiple roles throughout his career in international companies as Sales Manager, Business Development Manager, Program Manager and Service Delivery Manager. He worked in large projects for manufacturing companies and large implementation of enterprise products from major IT vendors (SAP, Microsoft, Oracle).
Somewhere along the way they met and started working together. They put their adjacent skills and knowledge together and now, more than five years later, they’re running a scale-up with a team of over 10 people which is truly changing the manufacturing industry with its team of Virtual Engineers. First in Romania, now in the DACH region and soon enough globally.
KFactory is not only an Industry 4.0 start-up. It is the first Romanian Industry 4.0 start-up that raised a pre-seed round and it is the first start-up that was funded by a SIF – SIF Transylvania, now known as Transylvania Investments Alliance. And, most importantly it is a start-up founded by SMART founders who knew how to chase the SMART Money so their business can expand faster and more efficiently.
KFactory’s challenge – Expanding to a foreign market that needs their services the most. And do it quick
When raising their seed round, KFactory’s main target was extending to the DACH region and global. Romania was already “conquered” to say so and their pipeline kept brining in new factories looking to use their Virtual Engineers. They also wanted to keep developing their product with more features for their customers.
“This last round was concentrated on extending in the DACH area, but also in further developing/adding new features to the products in KFactory portfolio, mainly the Team of Virtual Engineers. “
To do that, the founders needed to approach funding in a smart way. They knew their business priorities and that’s why they knew what to look for – not just cash but resources and connections. By doing this they were able to save valuable time on their expansion and business growth.
For a scale-up, traditional funding methods are not an option. Financial institutions are totally out of the question as they don’t take on such high risks. VC funds can be an option, but not any VC fund. If the founders of Kfactory would have raised from a traditional VC fund, they would have spent way more time putting the “dumb money” to use, as they come with no additional support and with a lot more unnecessary commitment and complicated term sheets. Of course, this is a viable option for those that only need cash. But KFactory needed more.
The founders knew their business and its priorities which are different than financial ones. To raise Smart Money as a founder you need to priorities accordingly – do you have enough time to do your hiring, grow your own network and develop the product? Or do you know how to get those things from a strategic investor to accelerate your time to market and expand in foreign markets faster than you would’ve done it by yourself?
Our Smart Founder – Smart Money – Smart Investor approach
For this type of founders we created our CVC fund – Fortech Investments. For founders that know what they want from investors and know how to get those resources with a clear plan. For founders that can prioritize and walk the “non-traditional” funding path to achieve their ultimate business goals.
These are the founders that we support with everything we have. Being the branch of an IT company with over 1000 employees and almost 20 years of experience in industries like Manufacturing, HealthTech, FinTech, PropTech and EdTech, we provide all our resources to help the founders we invest in.
They get access to our network of international enterprise clients that trust us and have worked with us before. They get tech for equity options if they don’t have time to waste on recruiting IT talent and waiting for an MVP. They get support on sales, marketing and recruiting and other essential business areas. They accelerate their growth and time to market with our industry and technical expertise and the growth shortcuts we have learned after working with other founders. Smart founders.
And these are the KFactory founders. They have worked before with another Smart VC fund –Sparking Capital – which was the lead investor of their Pre-Seed round. Just like us, they offer mentoring, network and capital. This showed us that Adrian and Vlad knew what they needed. They reached out to us and, together with Sparking Capital and SIF Transylvania, we became lead investors in their Seed round.
„KFactory addresses an industry very close to the interests of Fortech Investments. With a solid team and business purpose, KFactory represents a great opportunity for Fortech Investments to support the manufacturing domain and expand it’s portfolio. Leading this round, we offer both expansion capital as we do technical and sales expertise to help KFactory reach new markets and customers.” – Valentin Filip, VP at Fortech Investments
The results – Expanding to the DACH region in less than 6 months
Less than 6 months after the investment, they’re already seeing results. The headquarters from the DACH region are already open and they’re also working on their positioning in the market. They got in touch with clients as well as partners to keep developing the product. We helped by connecting them with our clients from the region and they were more than happy to help.
“The focus of KFactory for the seed round was also the positioning on the DACH market, Fortech Investments being the ideal partner for developing projects here.”
Their customer base has also increased by 500% and they now have over 300 factory machines connected to their product. They have brought in great results for their clients, such as a 20% raise in production, 99% decrease in manual data entry and time optimization and extra value of 50%.
They are working with some of the most established factories in Romania and they are bringing visible results for them in less than a month. They have a really smart product that is easy to use and will be welcomed in all the markets they are planning to enter. The need is there and we can only help them capitalize on it.
“The process is continually developing and the Fortech Investments team is working closely with us to help achieve all the initial objectives as fast as possible.”
Find out more about KFactory’s products, their story and their case studies on their website.