FactoryFour recently closed on $5 million funding as the manufacturing startup expands with a new West Coast office and looks to grow its team, said CEO Param Shah.
The Series A round was led by Menlo Park, Calif.–based venture firm August Capital, with participation from existing investor Refactor Capital.
Founded by 22-year-old Shah and CTO Alex Mathews while they were students at Johns Hopkins, the Mt. Vernon–based startup’s platform is designed to serve as a foundation to help manufacturers manage and automate many of the tasks on the way to shipping products, as well as use data to make decisions. Shah said many manufacturers are still using manual processes and relying on older software or spreadsheets, yet there are also new technologies such as sensors being introduced on floors. The company is looking to add new integrations for planning and managing customer relationships, as well as adding connectivity with these new technologies.
“It’s really about building a more connected environment,” said Shah.
The company now counts more than 35 clients, both in the U.S. and Europe. Locally, FactoryFour is partnering with Arnold Packaging to automate data collection on its production floor. The family-owned company has made visible moves to embrace technology in recent years. It launched an automation division last year, and this isn’t the first time it’s worked with a Baltimore startup. Company President Mick Arnold said FactoryFour’s platform provides real-time visibility into the jobs being completed on the floor, and the total labor associated with each task.
“We can quickly identify the products where labor estimates are inaccurate and address them. That gives us the most accurate representation of gross margin for the job,” Arnold said. “In addition, assigning the actual labor value gives us the correct assessment of our capacity needs. When we look at our backlog we can plan the exact amount of manpower needed, with few surprises. That predictability is critical, especially in today’s tight labor market.”
Throughout the sales process, Shah said he’s seen the importance of have compassion for the people within an organization who are taking risks on a product. In FactoryFour’s case, it’s the production managers who are seeing potential benefits, and ultimately are speaking up for something that will bring change to the organization.
“They’re the ones that see the most value, and they’re the ones that are going to take it and convince their team to adopt it,” he said.
After evolving the platform from an idea that started with 3D printing prosthetics, Shah said the company is in a phase where the product is built and validated. Now it’s looking to make a sales and marketing push. “2019 is the year where we make a name for ourselves in the whole manufacturing industry,” Shah said.
Following the funding round, FactoryFour is gearing up for expansion. Shah said the company is opening a West Coast office in Los Angeles. While San Francisco may have been a logical choice for a tech company, Shah sees value in growing outside that tech center and tapping into talent at the LA area’s universities.
“I saw what we were able to do in Baltimore…There are these tech hubs that are growing rapidly and we want to represent them and grow within them,” he said.
The company will also look to grow its team at both offices, adding to the more than two dozen employees currently onboard. Shah said the focus will be on building out a sales and marketing organization, as well as hiring in engineering roles. Ultimately, Shah said, the company is looking to increase its “global footprint.”
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