Machining of the future - Factoree of the Málek brothers receives seed investment of 900k euro
The brothers Jakub and Milan Málek have been digitizing the engineering production market for 6 years. Their company Factoree is a turnkey supplier of engineering products, especially for companies in the field of agricultural machinery, construction equipment, or public transport, and this year they will deliver over 1 million parts, despite not owning a single machine tool. In fact, Factoree's founders are leveraging the existing capacity of smaller Czech engineering companies and, thanks to their online platform, are meeting their demand with orders from all over the world. They have now raised 900 thousand euros from Presto Ventures, DEPO Ventures, and the SFG financial group to digitalize their communication with suppliers further and expand abroad.
The brothers Jakub and Milan Málek from Hradec Králové have been digitalizing the market of engineering production for 6 years. Initially, they offered a catalog of engineering companies called Kooperace.cz, which they expanded into a marketplace of free engineering capacities, where more than 1,300 small and medium-sized enterprises have joined. However, as it turned out, Factoree's customers, who are mostly large companies in the field of agricultural machinery production, construction equipment, or public transport, are mainly concerned about the actual communication and setting up cooperation with new potential suppliers.
"A lot of companies in the Czech Republic can produce quality customized parts, but the process of asking for them is more than tedious. At Factoree, we are succeeding in changing this - to ask for an exact engineering part is a matter of uploading its model. Customers in the engineering industry wait on average a week for a quotation, while with us they have it 15 minutes after sending the model, even with a guarantee of production capacity and delivery time," says Milan Málek, CEO and the younger brother of the founding duo. He adds: "Engineering is an important segment of the Czech economy that we will lose if it is not digitized."
The family-owned company's success is due to the digitalization and automation of the demand process. The Factoree software platform determines the necessary technology on the basis of a technical drawing and checks the capacities of suitable, verified subcontractors from among Czech small and medium-sized manufacturers. In practice, setting up cooperation is a process that takes several weeks or months, which includes arranging samples, packaging, and labeling specifications, setting up control mechanisms, and, above all, auditing the products themselves. Therefore, the originally purely technological Factoree platform has become a real factory, a turnkey supplier of engineering products that shields the entire process. Although they don't own a single machine tool, they plan to deliver over 1 million pieces this year, mostly simply machined parts in ferrous and non-ferrous metals. Factoree now has about 70 large clients among its customers, including billion-dollar engineering firms from the UK, Germany, Turkey, and Sweden.
For further development of the software platform, development of subcontractors, and, most importantly, further expansion in foreign markets, Factoree has now received a seed investment of 900 thousand euros from the VC fund Presto Ventures and financial group SFG.
"For us, investing in Factoree is a bet on innovation in engineering. Manufacturing is an important part of our economy and to remain competitive with China and the rest of Asia, it needs to digitize and become more efficient. The quality of Czech manufacturing is still at a high level, and we believe that Factoree will enable Czech companies to receive more orders from abroad by being able to react quickly to market changes. Our vision for Factoree is to become a European leader in the emerging category of Production as a Service," comments Roman Nováček, partner of Presto Ventures, on the investment.
"Factoree is building the world's largest ecosystem in the engineering sector to support the development of Industry 4.0, to respond to the pressure from OEMs on sustainability, digital communication, and to keep Europe as a leading manufacturer in the world. Add to this the fact that the company rests on the shoulders of a highly experienced team in the industry and founders who have a successful track record, the investment was an obvious choice," says Petr Šíma, Partner at DEPO Ventures.
"Factoree harnesses the great potential of Czech engineering by digitizing and automating the often complicated demand process. It gives subcontractors the opportunity to reach global orders, and it makes it easier for companies to communicate with suppliers and offer turnkey parts. It is a unique platform, and we do not have a similar one in our portfolio yet so it will definitely be interesting to see how it will develop in the coming years," says Michal Dědek, CEO of SFG.
The vision of the Málek brothers has not changed over the years of entrepreneurship, they want to continue to bring companies the possibility to produce any part or product, using the spare capacity of existing factories. The money from the investment will be used to develop the sales and customer service team, "We are now focusing on markets in traditionally industrially strong countries - Germany, Italy, France, and the Benelux countries," comments Milan Málek, adding: "Although we have become a direct supplier and moved more into actual manufacturing, logistics and engineering services, we are still a technology company. We are trying to show how digitalization can improve the entire industry and perhaps even save Czech engineering."