This Startup Is Solving Procurement Issues For Auto OEMs Gurugram-based CapGrid helps auto manufacturers reduce complexities in direct material sourcing and procurement, allowing them more scope for focussing more on innovation and enhancing customer experience
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The ongoing funding winter may have dampened spirits in the startup ecosystem in general but not everyone is finding it biting cold. "If the problem that you are solving is critical to your customers, the market is big and you have a sound business model, fundraising is not a challenge," says Himanshu Singh Raghuvanshi, whose automotive sourcing startup CapGrid raised a $7 million Series A round led by Nexus Venture late last month.
And what, pray, is the essential problem that CapGrid solves? According to Raghuvanshi, the founder and COO of the Gurugram-based startup, CapGrid helps auto manufacturers reduce complexities in direct material sourcing and procurement, allowing them to let go of unnecessary controls, innovate more, focus on new product development and bring out futuristic customer-centric products.
The Indian automotive industry goes back to the 1940s when pioneering companies such as Hindustan Motors, Mahindra & Mahindra and Tata Motors took root. Raghuvanshi traces the auto industry's growth over the years thus: "Until the late 1960s, the entire manufacturing operations were managed in house, leading to large scaling process complexities and lower productivity and margins. By the late 1970s, component manufacturing was allocated to Tier 1 and 2 manufacturers, enabling automakers to focus instead on innovation, efficiency, R&D, new product development and enhanced manufacturing throughput."
He believes that the last decade has been a watershed moment in the global auto sector, with focus increasing towards innovation, better customer experience, sustainability and so on. Manufacturers cannot afford to devote enough attention for dealing with complexities across the entire value chain, argues Raghuvanshi as he explains the need for startups such as CapGrid.
His company claims to be building a digital supply network with an advanced technology infrastructure, partnering with over 300 supply partners to get over 5,000 precision parts and components sourced, manufactured and delivered to customers' assembly line.
"Consolidation is definitely the future of both sourcing and procurement business. Easing the complexities of operations, reducing the procurement costs, better inventory management and direct cost benefits is what every OEM and Tier 1 automotive company aspires for. The validation of CapGrid's business model by leading players in the market is testimony to this," states Raghuvanshi.
Going forward, CapGrid plans to build upon its existing technology, digital supply network and cloud manufacturing alongside investing in young talent pool. "We still consider ourselves young in this sector and keep exploring new things every single day. This is a very difficult sector to break into and no one can define a template. One needs to figure out the way based on the offerings and capabilities of the company," explains Raghuvanshi.
