Estonia’s Katana bags €36M for its manufacturing and inventory software that helps scale businesses

Tallinn-based Katana, a manufacturing and inventory software for scaling businesses, announced on Thursday that it has raised $35M (approximately €36M) in a Series B round of funding. The company has now raised a total of $51M (approximately €52.55M) to date.

The investment was led by global VC firm Northzone, with the participation of impact-focused growth investor Lightrock and previous investors Atomico and 42CAP. 

As part of the deal, Michiel Kotting, a partner at Northzone, will join Katana’s board. Kotting says, “We’ve been deeply impressed with Kristjan and the team, who combine strong product skills, essential to building something as complicated and powerful as a basic ERP system, with commercial savviness and drive. We believe this unlocks the next category in modern-day, modular, user-friendly software, and has the potential to be a defining business in that category.”

Katana was also supported by their angel investors, including Sergei Anikin (former CTO at Pipedrive, also serving as Katana’s Chairman of the Supervisory Board), Sten Tamkivi (co-founder of NFTPort and former Skype executive), and Ott Kaukver (CTO of Checkout and former CTO of Twilio).

Fund utilisation

Katana says it will use the funds to scale its features for small to medium-sized manufacturers, allowing them to manage D2C and B2B sales using a single software solution.

To support these plans, Katana continues to expand its international team, which increased from 30 to over 140. As the company serves additional markets and larger clients, the addition of new product development teams will speed up feature releases, while the expansion of customer support teams will guarantee that outstanding customer satisfaction remains a major differentiator.

Kristjan Vilosius, Katana’s founder and CEO, says, “From offering software to single-person workshops to bigger and bigger manufacturers over time, Katana now serves over 1300 companies across 80 countries. This investment helps us continue to develop a manufacturing ERP platform customers love, as well as offer support to an under-served market which is having its own incredible renaissance.”

The era of “Made in China” is over

“Made in China” era of production comes to an end as manufacturers are moving closer to customers by selling directly through their own websites or online marketplaces, sometimes in conjunction with a B2B strategy. With so many alternatives available to them, consumers tend to choose brands that more closely match their particular beliefs, favouring sustainable, ethically produced, or organic goods over those that are mass-manufactured.

An increase in direct-to-consumer production has led to a surge of new manufacturers searching for software that will help them run their businesses holistically, tying together aspects of their operations beyond inventory management.

Most traditional business suites for manufacturing are yet to catch up with today’s usability standards, proving a barrier as they lack modern API functionality and generally do not integrate well with business essentials like e-commerce stores, accounting platforms, and shipping operators. Because of this, the ERP market is renowned for having poor UX/UI and low customer satisfaction. 

This is where Katana steps in. The company brings manufacturing software into the digital era and claims to match the standards of consumer technology and other SaaS verticals.

“Everything you need to keep manufacturing”

Founded in 2017 by Hannes Kert, Kristjan Vilosius, and Priit Kaasik, Katana is a modern manufacturing and inventory software for scaling businesses. Its plug-and-play manufacturing ERP (enterprise resource planning) software for SMEs supports real-time workflows, boosting productivity and enabling material inventory control.

Katana claims to offer everything companies need to keep manufacturing, uniting all the processes, tools, and software that manufacturers require with an “easy-to-use” ERP.

Since closing a Series A in 2021, Katana launched an open API, app marketplace, and over 60 integrations and feature releases. The platform provides compatibility with popular e-commerce sales channels and accounting tools such as Shopify, Amazon, WooCommerce, QuickBooks, and Xero, among others.

Manufacturing companies subscribe using their credit card after going through a 14-day, free trial. During the trial, they can test the functionalities and get assistance if needed. The subscription cost depends on the size of the client’s business and the complexity of the functionalities it needs. 

Vilosius says, “If you’re a five- to 20-member team, selling cosmetics or some cool gadgets through Shopify, a Katana subscription might cost $100-300 (approx €82-246) a month. A larger factory with 30 or 50 people might pay $400-1000 (approx €328-821) a month. We also have annual plans which offer discounts.”

Katana’s revenues come from the monthly or annual subscription packages it offers to manufacturers.