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Fractory raises €4.8M to accelerate growth

Estonian manufacturing startup Fractory has secured €4.8 million in funding, led by Finnish early-stage fund Kvanted, to fuel its growth in the UK and Scandinavia.

On-demand manufacturing service provider Fractory has secured €4.8M in additional funding from strategic investors led by Finnish early-stage fund Kvanted. This round will allow Fractory to expand its market presence, with a focus on the United Kingdom and Scandinavia.

Founded in 2017 by mechanical engineer-turned-entrepreneur Martin Vares, along with co-founders Joosep Merelaht and Rein Torm, Fractory operates a one-stop platform for on-demand manufacturing services that helps discover, compare, and fulfil metal fabrication production orders regardless of the manufacturing method. From CNC machining to welding and beyond, it speeds up production and saves costs, covering marine, industrial automation, automotive, and many other industries.

Since its start, Fractory has achieved remarkable success, doubling the turnover every year. This has caught the attention of Kvanted, a brand-new early-stage investment fund focusing on industrial technologies in Northern Europe. “Fractory’s important position in the world of manufacturing is clear to us, and we see the scope for its growth increasing through this partnership,” Kvanted’s founding partner, Axel Ahlström, says.

“Kvanted understands exactly what we are doing. They have a longer-than-average investment period to align with the lengthier development cycles in industrial tech. And they act as a connector, bringing innovative technology providers together with traditional industrial companies,” says Martin Vares, CEO of Fractory.

Since the start, Fractory has stood out for its combination of speed, quality and reliability. It currently employs 64 people across Estonia and foreign offices, reaching €15M in turnover last year. Now, the company is accelerating — in 2023, Fractory received its first €2M+ order. “While we were initially approached because of the platform’s automation, speed, and convenience, more and more customers are looking for quality and delivery reliability through our network of partners,” Vares explains.

The €4.8 million funding round saw participation from several other investors, including VC funds, angel investors, and entrepreneurs who have been backing the company since its inception, including Superhero Capital, OTB Ventures, Trind Ventures, United Angels VC, Startup Wise Guys, and Verve Ventures.

“I believe in the transformative impact Fractory holds for the industrial sector. And I believe in the founders, in the wider team, and their vision,” says Taavi Kotka, the former Chief Information Officer of the Estonian government and Fractory’s angel investor.

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