Factories have been somewhat left behind in the innovation world, but one Austin-based company is taking advantage of that to capitalize on increasing productivity.
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Existing investors Next Coast Ventures and Indeed co-founder Rony Kahan also participated in the round, which brings the startup’s total raised since its inception in 2014 to a known $20 million. Next Coast led the company’s Series A while Kahan led a seed round of an undisclosed amount. (Notably, all investors thus far are also Austin-based).
The company’s goal is to use predictive analytics and prescriptive artificial intelligence (AI) to help manufacturers “optimize inventory, avoid shortages and improve on-time delivery.” It says it does so by providing “actionable, automated recommendations” and allowing for real-time collaboration among systems, suppliers and sites. The goal, of course, is to ultimately lead to improved profitability.
“We are dedicated to empowering factory procurement teams to take control of their inventory,” said LeanDNA CEO Richard Lebovitz, who has decades of experience working directly with global factories.
“One thing is abundantly clear,” he said. “Factories have been left behind.”
The company currently has more than 30 customers, including several multibillion dollar manufacturing companies, across over 200 global sites in 12 countries. LeanDNA claims that its customers see a 13.5 percent inventory reduction within the first three months of implementation of its software, “with some customers experiencing reductions of 30 percent or more.”
We weren’t exactly sure what LeanDNA meant by inventory reduction. So we asked. Its answer: “LeanDNA optimizes the physical inventory held by manufacturers in their factories. Depending on company objectives, that might mean reducing physical inventory so manufacturers have the right parts they need at the right time without a large excess sitting in their sites. Other times, that might mean ensuring they have enough of the right parts at the right time to avoid critical shortages and late delivery.”
Growth and opportunity
Following the company’s $4.5 million Series A funding announcement in 2017, LeanDNA says it doubled in size, customer count and revenue in 2018. It currently has 43 employees, compared to nine in 2016, and is naturally looking to hire with its new capital.
Looking ahead, the company also plans to use the funds to scale the company’s “global offering, expand its customer base and support other strategic growth initiatives.”
S3 Ventures Partner Charlie Plauche believes LeanDNA’s platform has the potential to “capture a significant share of the massive manufacturing market.”
Indeed, LeanDNA says it is “pursuing a $4 billion market of discrete manufacturers with more than $10 million in inventory.” It’s specifically focused on the following verticals: aerospace and defense, medical devices, automotive and industrial manufacturing.
A hot market
In other Austin-related news, Austin-based Popspots on Tuesday announced a $5 million Series A funding round led by Silverton Partners. The three-year-old startup says it’s building an operating system to help retailers and brands manage and market their products in grocery stores. It says it works with over 25 retailers so far and is “on track to be in over 1,500 stores nationwide within the next year.”
Popspots’s initial focus is on the checkout aisle, where it uses smart displays to provide video advertising (under the trade name ‘Grocery TV’) and merchandising services such as out-of-stock tracking and planogram management. It’s not the only Austin-based company in the space. Last month, we wrote about Pensa Systems, an Austin startup with an eye on “eliminating” a trillion dollar blind spot for the retail industry, raising $10 million in additional seed funding.
Pensa says that its system “automatically and systematically tracks in-store inventory using advanced computer vision, patent-pending artificial intelligence and autonomous drones to see and understand what is on store shelves.”
Last month, we covered how Austin is on track to possibly reach $2 billion in venture funding for the year, which is pretty impressive. In total, Austin startups raised a known $1.7 billion from January to October, according to Crunchbase data. By comparison in 2018, Austin’s total venture raised amounted to $1.55 billion, according to Crunchbase data.
Illustration: Li-Anne Dias