Why We Invested in Knowde: Revolutionizing the Chemical Industry Through Digital Transformation

As an investor, I am constantly on the lookout for founders and teams building companies that not only solve complex problems but also have the potential to redefine entire industries. It’s uncommon to encounter such companies, and even rarer to have the opportunity to partner with them. This is why I’m thrilled to announce BCV’s investment in Knowde, an AI-powered digital commerce solution truly transforming the chemical industry.

BCV led Knowde’s $60 million Series C round and I could not be more excited to partner up with Ali Amin-Javaheri, Wojciech (“Wojo”) Krupa, Janakiraman Swamy, Jeffery Reid, and their team on this journey.

I got to meet Ali, co-founder and CEO of Knowde, in the summer of 2022. Back then, Knowde had built and started scaling the first online marketplace for the chemical industry. Immediately, Ali and I clicked — we were both first-generation immigrants from the same part of the world who built our businesses from scratch.

Ali’s mission was ambitious and bold. He was determined to digitize the chemicals industry by transforming how buyers and sellers conduct business in the digital age. At first, this task seemed daunting to me. Chemical businesses are notorious for being slow to change, resistant to innovation, and hesitant to embrace new ideas. But if anyone could do it, it would be Ali and his team. Ali’s background uniquely positioned him to lead a company revolutionizing the industry. Growing up in a family deeply rooted in the chemical sector, he developed an early understanding and passion for the space. In early adulthood, he saw the problem Knowde is now solving first-hand when he joined ChemPoint, a chemical tech startup that connects chemicals buyers with sellers.

From our initial conversations, it was clear that Knowde had the potential to execute on its vision of being the platform to fundamentally change how the industry operates. Over the next couple of years, Knowde continued to build out its product suite, onboard more chemical suppliers, and we saw Ali’s vision begin to play out. By May 2024, as Knowde was preparing for its Series C round, the timing felt right to deepen our partnership.

Many things were very appealing and unique about Knowde. Going deep on each would make this blog post way too long so I’ve highlighted just the key points below:

· Expansive, Untapped Market: Knowde operates in a massive, relatively greenfield market ripe for innovation.

· Competitive Positioning: The company faces no relevant competition today.

· Distinctive Moat: Knowde’s AI engine and proprietary chemicals dataset create a powerful flywheel effect, strengthening its position as more suppliers join, further distancing the company from any future competitors.

· Long Term Vision: A multiproduct approach with a clear line of sight to building a full commerce enablement platform for this industry.

· Exceptional Financial Performance: Incredible financial performance with top-decile metrics across the board.

· Cohesive and Experienced Team: Knowde is led by a cohesive and experienced team, united by a vision to build a multi-billion-dollar business, with a clear roadmap on how to get there.

The Chemical Industry’s Digital Gap

The chemical industry is one of the largest and most critical sectors in the global economy. Despite its size and importance, it has remained largely untouched by the digital revolution that has transformed other industries. The buying and selling processes within this industry are still predominantly conducted through traditional methods — in-person meetings, phone calls, emails, and even fax machines.

The biggest hurdle to modernization is the industry’s struggle to standardize and digitize product data. Unlike straightforward products like clothing, where attributes like color and fit can be easily listed, chemical products require complex and extensive documentation, often spanning dozens of pages. This includes product specs, safety data sheets, technical data sheets, usage instructions, handling guides, regulatory compliance docs, and additional research data. Products are continuously added to suppliers’ catalogs and certain documentation is periodically updated.

With thousands of products and multiple SKUs per product, chemical suppliers face an impossible task in organizing this information. Additionally, there’s no standard system for naming and describing products, leading to inconsistencies across suppliers. As a result, product discovery is a slow and cumbersome process, heavily reliant on sales reps who guide buyers through vast catalogs.

These outdated processes create inefficiencies, making it hard for buyers to find and purchase the right products but up until recently, there was never a solution to the product data problem. This is where Knowde steps in.

Knowde’s Solution

Knowde has developed an innovative digital commerce platform that addresses the core challenges faced by chemical suppliers and buyers. By structuring, aggregating, and normalizing product data across suppliers’ catalogs, Knowde makes it possible for suppliers to showcase their products in a searchable and filterable digital format.

The key to Knowde’s solution is its AI knowledge engine, which powers its core Master Data Management (“MDM”) product. This is a data fabric that ingests, extracts, cleanses, and harmonizes product data. Knowde uses OCR to extract information from unstructured file formats such as PDFs but can ingest any file type. Then, it extracts all relevant data from each source, cleanses and dedupes it, and maps it to its proprietary and standardized classification system. Following this transformation, the cleansed, structured, and reclassified data can flow to destinations such as Knowde’s CX Application (white-labeled digital catalog) or other third-party systems like an ERP, CRM, etc.

In addition to the MDM and CX App, Knowde also has a Marketplace product. Built on top of the MDM, the Marketplace centralizes product discovery and buying. The Marketplace is free to join for both suppliers and buyers — Knowde currently has 8,000+ suppliers on the Marketplace, 2 million+ active customers in the last 12 months, and keeps growing at an accelerated pace year-over-year.

A Visionary Team Set to Succeed

I am rarely as impressed as I was with Knowde’s leadership team. Not only are they all talented and incredibly accomplished, they also share the same energy and form a highly cohesive team with strong bonds. They serve as a powerful nucleus (or “node” — pun intended) to the larger organization.

Ali and his co-founder Wojo met during their MBA at Kellogg. He serves as Knowde’s Chief Technology Officer now and has seen success building online marketplaces before at companies like LinkedIn and CareerBuilder. An engineer with an MBA, Wojo has impressive technical capabilities as well as leadership skills that help him lead a team and build a business.

Swamy, Ali’s former colleague at ChemPoint, joined Knowde shortly after as Chief Knowledge Officer, a unique and critical role given Knowde’s business. He heads up a team of chemical engineers who work on creating a standardized chemical classification system. Prior to Knowde, Swamy spent over a decade working in the chemicals space and spent over a decade studying materials science and engineering.

Chief Product Officer, Jeff, met Ali when his product design consultancy firm signed ChemPoint as a client. Jeff has a unique background, starting off his career in acting. When the internet boom hit, he taught himself HTML, started building websites, and found himself in product leadership and corporate strategy roles. His colleagues have described him as a “visionary”.

Ali and his team bring a deep understanding of the chemical industry, combined with a clear vision for the future, and operational expertise.

The Road Ahead

While what the Knowde team has built so far is impressive, what lies ahead is even more exciting. Ali’s vision for his company is bold and ambitious and I could not be more excited to back him, be part of this journey, and see the impact it will have on the chemical industry.

I believe that Knowde has the potential to capitalize on this massive market, and the BCV team and I are proud to support the company on this journey.