Fractory, founded four years ago, has developed a platform for engineering companies where engineers can upload computer-aided design (CAD) files for instant quotation. Algorithms developed in-house select the most satisfactory manufacturing partner for a given project, based on the client’s location, materials used, the required machining processes and the available capacity of manufacturers.
“This is essential as we are tackling a lifelong industry problem – wasting engineers’ time in the process of selecting and evaluating various offers,” explained Martin Vares, the CEO of Fractory. “Currently, it’s normal for pricing a detail to take a number of days and involve a lot back-and-forth e-mailing. Our platform provides the opportunity for a person to get a quote for their work within seconds – an engineer can upload a CAD file to the platform and get a quote back instantly,” he said, emphasising that the developed platform brings together solutions to all previous time-consuming challenges.
All of this helps save time. “We offer our clients an immediate price quote with delivery estimation and supervise the whole process from beginning to end,” Vares explained. “A sustainable approach is also essential. Through aggregating orders, we reduce material surpluses and transport distances when clients are near each other,” he explained the value the company is adding.
Fractory only earns money from subscriptions
All parties can use the platform for free. “A number of engineers are uploading their products in the design phase, in order to compare prices or make an offer to their client, matching the actual market state,” Vares said.
In accordance with its business model, Fractory only earns money if a requested solution morphs into a real client order and if the engineer’s offer is accepted or another party is found. “The exact percentage hinges on a number of factors, including the order size,” Vares said. “The aggregation of orders and using suitable partners according to the project at hand frequently allows us to offer a below market price, even with taking our percentage into account. We have noticed over a period of time how each new manufacturer with their own skills and preferences also increases our competitiveness.”
Strong ambition for growth
The company forecasts a bright future and they expect to grow their customer base by about fivefold over the next two years. “Approximately half of the growth will arrive from our current largest market, the United Kingdom, where we have already established a strong foundation as well as a certain degree of recognition,” Vares said confidently. “We also expect quick growth from new markets, primarily the USA, because we have polished our expansion capabilities.”
Fractory has primarily operated in Estonia, the United Kingdom and Nordic countries as of now, and the increase in demand has recently compelled them to open an office in Finland. “We will open a branch in the United States in the beginning of the new year; in addition, we plan to expand into French and Italian markets next year,” Vares explained.
Regarding product development, they recently launched CNC machining with automatic pricing. “We are also planning to add 3D printing to our platform as the next step,” said Vares.
Fractory’s previous numbers support these ambitions. The company continued to grow throughout the pandemic when many manufacturing companies sealed their doors temporarily or permanently. Fractory’s network of partners offered the opportunity to choose the manufacturer that was best able to complete an order. The company’s turnover increased by 400% from February 2020 to today because of this, indicating the efficiency of the digital production process during this challenging period.
A potential unicorn
Andres Labi, Invest Estonia’s Director of Business Development in Central and Eastern Europe, said that Invest Estonia has had good cooperation with Fractory and the company’s activities have definitely attracted attention from investors. “It is well-known that Fractory is seen as one of the potential next unicorn companies in the Estonian startup ecosystem, which in turn has a positive impact on the decisions of investors.”
Invest Estonia has brought the company into contact with potential investors at the Startup DemoDay and Unicorn59 online events, both organised by Invest Estonia. Labi said that Invest Estonia offers support to Estonian companies by bringing them into contact with investors during various events. But making the final sale is always up to the company, itself – and Fractory is obviously good at that.
Fractory’s CEO Vares, on the other hand, said that the intermediation by Invest Estonia has been really useful. “We have been involved in a number of events and virtual conferences as a result of this. Every bit of coverage is important for us and the coverage of a national organisation gives us an extra factor of trust,” he said. “Besides coverage, we have also been helped with useful advice. More than a few questions have been answered quickly, thanks to Invest Estonia’s advisors in both, the United Kingdom and the USA.”
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