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Estonian ERP startup Katana that ‘just makes manufacturers love their software’ raises €36M

‘Make locally, sell globally’ is the motto and the principle of one of this year’s most successful Estonian startups, Katana – a company that announced raising another €36M of investment.

Katana is an enterprise resource planning (ERP) platform for small- and medium-sized manufacturers. Founded in Estonia in 2017, it is an ERP specifically for the manufacturing sector, with prebuilt integrations for many of the most common tools that a manufacturer might use, including e-commerce, accounting, shipping, forecasting, CRM, and other software. “We focus on manufacturing companies, this is why we know their processes and cover their workflows more thoroughly – or have a better fit for the manufacturing companies,” co-founder Kristjan Vilosius told Estonian business newspaper Ärileht.

Initially, Katana started filling a very narrow market niche. They created manufacturing and inventory management software which helped micro manufacturers reach their clients easily through Shopify. Now, Katana has become a useful tool for small and medium-sized enterprises which have linked to (or are about to be able to link to) platforms such as Amazon, WooCommerce, Quickbooks and Xero.

Getting rid of frustration among manufacturers

Kristjan Vilosius, Hannes Kert and Priit Kaasik are the core team behind Katana. The idea began to develop around 10 years ago – before founding Katana, Vilosius was an active angel investor. He also put his money and time into manufacturing companies in which he is still a shareholder. He invested in timber production and windows manufacturing, as well as in the well-known ultracapacitor manufacturer Skeleton Technologies, where he was part of the council.

“I saw the frustration, modern companies felt when they tried to use the old systems that were dominating the market,” Vilosius recalled in 2021, how Katana had begun.
Half of Katana’s clients use the option to put their products up directly on the online shop, but the rest are larger companies who use wholesale distributors or mediators. The company is moving towards large and global manufacturers. “It is a long journey, but we want to get there,” Vilosius stated back in 2021. Having made a part of it by now with growth in investment, as well as the number of employees (from 30 to 140), the company keeps its clear goal of helping the manufacturers with ‘software they love as much as their products’ in mind.

Helping to end the ‘made in China’ era

“The rise in D2C manufacturing has driven a small manufacturing renaissance, giving consumers a wealth of options that reduce the hold of brands relying on mass production,” Katana co-founder and CEO Kristjan Vilosius explained in an article on TechCrunch. “As manufacturing moves closer to the ever-increasingly conscious consumer, brands that rely on local production and inventory are gaining market share. In short, the ‘made in China’ era is ending.”

Kristjan Vilosius, co-founder and CEO of the business, spoke at the Estonian startup pitching event Unicorn59 back in 2021, saying that Katana’s goal is to make the manufacturers love Katana’s software as much as they love their own products.

The recent series B investment round was led by global risk capital company Northzone that is known as one of the early investors of Spotify, Personio and Trustpilot. The round included earlier investors Atomico and 42CAP, as well as Lightrock and several Estonian investors, such as Pipedrive’s CTO Sergei Anikin, Sten Tamkivi, Ott Kaukver, etc.
Katana had previously raised around $16 million, most of it in the Series A round last year.

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