Katana, the Tallinn-based “smart manufacturing” software, has raised $3.9 million to help direct-to-consumer manufacturers scale their business. The financing includes $2.2 million from Munich-based seed investor 42CAP, as well as existing investors. It also includes the conversion of a $1.7 million pre-seed convertible note from late 2018, financed by angel investors.

For many small or medium manufacturers who choose to bypass retailers and wholesalers, it’s a struggle to manage the business logistics. The tools available are mainly messy do-it-yourself spreadsheets or expensive enterprise resource planning software.

Created by manufacturers who were frustrated by both of these options, Katana is an affordable cloud-based solution that helps manage production and inventory. The platform also offers integrations to the most popular tools for e-Commerce or SME management, such as Shopify, WooCommerce, QuickBooks Online, Xero, etc. The Estonian startup currently serves hundreds of workshops and factories from such varied industries such as cosmetics, leatherworking, food and beverages, and electronics.

Attracted both to Katana’s product and the startup ecosystem that bore it, Alex Meyer of 42CAP explained the firm’s decision to invest: “We are absolutely delighted that Katana is part of our portfolio. The team delivers what we call a truly seductive solution, for a global market on the rise. With their first-hand understanding of manufacturing processes, they offer companies unimpeded access to the new era of directed production. Moreover, Katana highlights Tallinn as one of the most interesting hubs in Europe in the years to come.”

Kristjan Vilosius, founder and CEO at Katana, echoed Meyer’s excitement, saying, “We couldn’t be happier to have 42CAP on board and are extremely grateful for our current investors’ continuous support. We’re thrilled with the opportunity to fuel our growth even further and establish Katana as the leading smart manufacturing platform for SMEs.”

The fresh funding will speed up development of new features and also expand the team, with new hires across software development, marketing and sales, customer support, and product management.

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