Hitachi Ventures co-leads Makersite’s 18M Series A to decarbonize global manufacturing sector
For enterprises to become ready for the sustainable economy, understanding the product environmental footprint along with its impact on cost, compliance, and supply chains prior to product development will become an absolute imperative. Makersite will enable sustainable product development by bringing actionable CO2 reduction insights into the manufacturing sector.
We are thrilled to announce that Hitachi Ventures has co-led (together with Translink Capital, Silicon Valley-based VC fund) the 18M EUR Series A round of Makersite — the AI & data platform that powers sustainable product and supply chain decisions at scale. Joined by new investors such as Kompas.VC (EU-based VC fund) as well as continued support from the Seed investor Planet A, we are excited to support Makersite’s mission to decarbonize the manufacturing industry and its products. The fresh capital will be used to largely expand the team to double down on the strong growth of the last 12 months.
Unlocking the massive carbon reduction potential in the underserved manufacturing sector
The global manufacturing sector is undergoing a transformational shift arguably more disruptive than digitalization: sustainable transformation. One-fifth of the global carbon emissions comes from the manufacturing sector, yet manufacturers lack the actionable data insights and tools to tackle the complex challenge of developing greener products.
Transforming companies means changing its products, which inevitably leads to changing its supply chains. In fact, ≈80–90% of emissions in the manufacturing sector are embodied in its supply chains and thus estimated to be >11x higher than operational emission. And while corporate carbon accounting is complex enough, accounting for Scope 3 or product-related emissions becomes infinitely more complex: a standard laptop has 20–30k independent components, which themselves can consists of up to 600 line items per bill of material (BOM). This complexity grows exponentially when considering product variations, differences in geographies or simple changes in suppliers (…). As it takes months for Lifecycle Assessment (LCA) experts to account for a single product’s carbon footprint, it comes with no surprise that approximating Scope 3 emissions has become the standard for dealing with this complexity. However, scarifying accuracy and depth will not drive the change needed in this industry. Simply put, for the bulk emissions of our economy’s backbone, we were unable to granularly account for CO2 hotspots and drive meaningful reduction quickly.
Makersite has developed a next-gen supply chain digital twin technology, which enables global manufacturers to solve impact, cost, compliance, and risk challenges linked to sustainable product and supply chain decisions. Blue-chip customers and sustainability role models such as Microsoft, P&G and Lush (…) are already using this advanced product-lifecycle assessment suite daily.
Accelerating the move to a sustainable economy by changing the way things are made
As consumers increasingly embrace sustainability, voices of regulation tightening get louder and the number of Net Zero pledges rise, unlocking the carbon reduction potential embedded in products is becoming an absolute imperative to survive through this sustainability transformation. Makersite has developed the holy grail of sustainability intelligence platforms to accelerate product development, reduce costs & have strong environmental impact throughout the entire product lifecycle.
Makersite’s AI and Knowledge Graph-powered platform cleans, connects, and enriches cross-departmental data with third party data sources to create live digital twins of complex products and supply chains for analysis and decision support.
Seeking to simplify the status quo, Makersite’s software can return an array of product-related information across sustainability, cost and compliance metrics by simply uploading a BOM. At an instant, the AI algorithms automatically detect and connect product components to the right supply-chain data from Makersite’s harmonized and hyper-connected database combining data from 140 best-in-class sources. The system maps out the full supply chain of a product to provide deep-tier transparency and understanding of the entire product environmental footprint, should-costing, and compliance risk orders of magnitude faster than any current approach. With this, Makersite is the only cloud-based solution combining data aggregation and live applications for agile product life cycle management giving decision-support to product champions in engineering and procurement teams.
By putting this data at the user’s fingertips, Makersite empowers its clients to design greener products and build resilient supply chains at the start of the development cycle. This revolutionizes the slow, 50-year-old stage gate process and accelerates innovation. Existing clients yielded 7–10% shorter development cycle and reduced costs of 4–7% while however designing sustainable, compliant, and safe products with lower risk.
Why did we invest?
Products that come to market today, have often been designed many years ago. To align this time lag in manufacturing with our immediate sustainability ambitions, the market needs a solution that will help design tomorrow’s sustainable products today. For enterprises to become ready for the sustainable economy, understanding the product environmental footprint and its impact on cost, compliance, and supply chains at the point of product development will become a necessity. Makersite comprises everything needed to solve this and become the “must-have” tool in the industry.
Bringing depth into the carbon accounting world
Makersite has an unparalleled track record in closing the Scope 3 blind spot for the most convoluted industries of the global economy. In 2021 alone the tool performed an unprecedented 8 million LCAs. Working with blue-chip companies on one of the most confidential parts of their business, Makersite has cracked the toughest nut in the carbon accounting landscape. With clients in automotive, consumer electronics, energy (…), Makersite currently covers 35% of global supply chains.
Compelling Founder-Market Fit
The team boasts deep Lifecycle Assessment and product environmental footprint expertise. The company’s founder Neil D’Souza has a long history working as CTO for Thinkstep, which later was sold to Sphera. Recognized as a leading expert in the industry, Neil is utilizing his background to build a passionate team to decarbonize the manufacturing sector globally.
Impressive traction and expansion driven by “word-of-mouth”
The 40+ people team has gotten into the scope of the world’s leading spearheads for sustainability such as Microsoft, Vestas, LUSH etc. Despite only being a couple years in operation, Makersite demonstrates a history of significant expansion ARR showing NRR north of 300% across the board. More impressively, this has been fueled by pure word-of-mouth distribution channels until now. This proves the clear need of Scope 3 transparency and thus where regulation is headed.
Conclusion
By bringing the much-needed data insights and transparency into Supply Chains & Manufacturing, Makersite is tackling the root-cause issue of actionable carbon footprint reduction. This positions the company extremely well to become the leading solution for manufacturing teams to embrace circular & sustainable product design. We’re beyond excited to join the team’s mission to decarbonize the manufacturing sector as it continues to expand the number of companies aiming to decarbonize their products and supply chains.
Authors: Galina Sagan, Principal & Jan Marchewski, Investment Analyst at Hitachi Ventures
About Hitachi Ventures
Hitachi Ventures is the strategic corporate venture capital arm of Hitachi, Ltd. We invest in innovative startups with strategic relevance to Hitachi, Ltd. that address society’s key technological challenges in target areas such as mobility, health care and smart life, industry, energy and IT. With offices in Munich and Boston we cover Europe, Israel and North America. We look for leading startups with exciting technologies and business models which we support as investor as well as through strategic collaborations with Hitachi business units.
