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MUMBAI : Zetwerk, a business-to-business manufacturing services startup, is in talks to raise $100-125 million in a funding round, valuing the company a notch higher than its last valuation of $2.7 billion, three people with knowledge of the development said.
The company has held talks with funds such as Premji Invest, TCV Partners and Catamaran, the people said, requesting anonymity. The round will be entirely primary fundraising, with the company’s existing investors also topping up, they added.
In December, Zetwerk raised its Series F funding round of $200 million from investors led by D1 Capital and Greenoaks, valuing it at $2.7 billion. The four-year-old company’s previous $150 million funding round helped it enter the unicorn club, or startups that are valued at more than a billion dollars.
The retreat of technology stocks and monetary tightening by global central banks have made it tougher for Indian startups to raise money after raising record funds in 2021 when a deluge of cheap money and the pandemic-fuelled digitization had sent valuations soaring.
Geopolitical tensions, soaring inflation and rising interest rates have now made investors more cautious towards riskier investments, in a marked change in sentiment this year.
In the latest funding round, Zetwerk is likely to choose a domestic fund to maintain balance on its capitalization table or captable, one of the three people said. “Though there is inbound interest from global investors and crossover funds, the company is inclined to accommodate a domestic fund,” he added.
The company counts funds such as Avenir, IIFL, Greenoaks Capital, Lightspeed Venture Partners, Sequoia Capital and Accel as its other investors.
The company turned Ebitda-positive in the year ended 31 March and was set to clock revenue of around ₹3,500 crore for the year, Amrit Acharya, co-founder and chief executive of Zetwerk, said earlier.
Ebitda refers to a company’s earnings before interest, tax, depreciation and amortization.
Founded in 2018 by Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary, Zetwerk helps small and medium enterprises translate their digital designs into physical products. It operates in more than 25 industry segments.
The company offers manufacturing services to sectors such as consumer goods, apparel, defence, space and aerospace. Zetwerk saw its revenues triple to ₹949 crore for the financial year ended 31 March 2021 and is likely to have posted similar growth in FY22, according to Acharya.
Currently, Zetwerk gets around 85% of its business from the Indian market and about 10% from its international customers.
A spokesperson for Zetwerk denied the development. Emailed queries to spokespeople for TCV, Premji Invest and Catamaran, did not elicit any response.
Business-to-business manufacturing companies such as InfraMarket.com, OfBusiness and Zetwerk have seen robust growth in the last two to three years, and with increasing stress on make in India, the companies have benefited from India Inc.’s drive to manufacture locally.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
