At the click of a button, e-commerce introduced us to the world of on-demand products. Tamil Nadu-based startup, Frigate, has extended this idea to manufacturing services. Co-Founder Dr Tamizh Inian tells everything about his innovative business platform to EFY’s Yashasvini Razdan.
Q. Could you tell us how you came to set up this business?
A. I envisioned a platform where dispersed suppliers could be showcased to a global audience. The aim was to offer a lifeline to these suppliers, connecting them with potential customers beyond their existing circle and safeguarding their survival. Frigate has created a marketplace that brings all these together.
Initially launched as a proprietorship company, it was later converted into a private limited company after I observed demand in cities where I had contacts. I chose to continue, recognising the potential and having a financial safety net. In the initial stages, we focused on product development and prototype creation, catering to original equipment manufacturers (OEMs) across India.
In 2021, we decided to pivot our approach. Focusing solely on product development posed scalability challenges, as each product demanded three to six months and limited our growth despite higher margins. As I observed the startup landscape, with companies like Swiggy and Flipkart, I contemplated this from my perspective in Trichy. Now you see, being based outside the major cities like Chennai, Bengaluru, Pune, or Mumbai, I felt the need to think outside the box. Leveraging my network of suppliers across India, which I had cultivated during my previous ventures, became a priority. I realised many small suppliers—often operating with limited equipment and serving nearby larger OEMs—struggled with marketing and relied on just a few local customers. These suppliers are highly vulnerable, lacking the marketing know-how to reach beyond their limited network, and risk losing income if a major customer withdraws. Many of them were former employees of their primary customers, and upon branching out, they expected a steady flow of orders to sustain their business. When those orders stopped, survival became a nightmare.
My vision was to address this demand-side challenge by becoming a single point of contact for all outsourced components. We intend to simplify manufacturing for customers.
Q. Please tell us more about your expansion strategy.
A. The journey started with machining and expanded into sheet metal fabrication. From 2021 to 2022, I operated the company as a one-person enterprise. During this period, we achieved an asset turnover of four to five million rupees in the first year. After this, the focus turned towards promoting the business model and onboarding numerous suppliers. This strategy paid off as I presented the concept to global customers. Notably, we secured a customer from the US, a company backed by Flipkart called Nimble Robotics. This marked a significant achievement in our first year.
Starting from 2022, our growth trajectory has been impressive. We have established ourselves as a supply and demand platform, catering to various sectors. Our expansion began in the northern regions, where we have dedicated product teams. I personally oversee the marketing aspect of the business. Our approach is dual-pronged: for the supply side, we handle marketing for the suppliers, while on the demand side, our focus is on operations and execution.
Furthermore, our team expanded during this period. I welcomed three additional co-founders, each with their unique expertise. One is a former colleague, another is my brother, and the third was connected with me through LinkedIn.
As time passed, we intensified our efforts to engage with angel investors and venture capitalists (VCs). In April 2022, we secured our seed funding round, which amounted to ₹18.5 million. The contributions ranged from ₹500,000 to ₹10 million, representing a diverse investor base.
Q. What are the electronics products that you manufacture?
A. Our focus is not on manufacturing end-user electronics. Instead, our expertise lies in supporting various stages of the electronics manufacturing process. We cover printed circuit board (PCB) manufacturing, as well as the production of enclosures, predominantly plastic and metal ones. Our capabilities extend to assembly, allowing us to deliver a complete product. However, it is important to note that we do not engage in the design and development phase; our specialisation centres around full-scale manufacturing.
Q. What inspired you to come up with a business venture like this?
A. I started this venture back in 2011 as a side hustle. Coming from a business family, I was inclined to focus on financially driven problems and began earning income even before formally naming the company. I worked with various small businesses to develop prototypes, while at the same time I was a full-time employee at a global OEM. During that phase, a production manager contacted me, and we collaborated with a fabricator, successfully developing around 36 prototypes at that time.
Looking back, I always aspired to contribute to product development. With a background in mechatronics, I started as a designer but wanted to see those designs realised through manufacturing. With the onset of COVID-19 in 2021, I decided to leave my previous job and focus entirely on this endeavour.
Q. Where are your target customers based?
A. Our business model is geared towards global OEMs. We have consciously chosen not to work with Indian OEMs because we focus on solving issues for high-cost countries like the US and the UK. These nations lack low-cost manufacturing capabilities and often rely on countries like China, Vietnam, Indonesia, and India. Our goal is to bridge this gap by facilitating manufacturing in India.
Q. How do you match the demand with the right manufacturing partner for electronics?
A. Our robust supply chain team is an asset in our operations. We have employed a tech-based and data-driven approach that involves working closely with suppliers in advance. Through this method, we gather around 120 data points, establishing checkpoints throughout the order process. This helps us understand the customer’s needs comprehensively. For instance, if a customer has a design requirement, we ensure a designated machine for its production. We assess whether the customer has the necessary resources in-house or plans to outsource certain aspects such as painting, assembly, and material storage. Our analysis also delves into financials, examining their turnover over the past three years and their track record in content delivery. This data accumulation spans a decade, not merely recent information, which is invaluable in our operations. They empower us to make informed decisions and match designs with the most suitable suppliers, ensuring seamless compatibility and collaboration.
Q. How does Frigate’s business-to-business (B2B) cloud platform work for companies looking to manufacture electronics products?
A. Our focus for the next seven months is well-defined. A common issue manufacturers and buyers face is the lack of knowledge about supplier capacity, capability, and availability in real-time. These factors can change frequently based on various variables. Our strategy addresses this by creating an array that detects and aggregates the information about the machines available on our platform, encompassing various types of machines and overall capabilities. This will be achieved by connecting all these machines to our cloud network.
When customers upload a drawing or design, they will instantly receive insights about the available machines that can handle the task. This information will encompass three crucial aspects: capacity, capability, and availability. The capacity metric outlines the number of machines that can undertake the task, the capability signifies which machines are suited for the specific geometry, and the availability denotes the machines currently unused out of the total capacity.
We have implemented a rating system for suppliers. The speed of their response to inquiries is one parameter we evaluate. Moreover, we consider the quality of their quotes, ensuring they are neither overly high nor extremely low. The comprehensive data points we have gathered earlier come into play in this rating process. The timeliness and quality of deliveries are integral to the rating. Once an order is placed, we monitor the time it takes for the supplier to confirm the order and the adherence to the delivery schedule. If a supplier delivers within a shorter time than the specified lead time, their ranking is enhanced, increasing their chances of being selected for future orders.
Q. Could you explain how you manage the order inventory and track the progress of the orders?
A. We currently serve around 27 customers. Both the customers and manufacturers have access to a dedicated dashboard. This provides an overview of their ongoing projects. If a specific project is selected, they can track its progress, similar to how Amazon provides package tracking. The project status could include stages such as project initiation, raw material procurement in progress, manufacturing commencement, and quality control initiation. The entire process, including sales confirmation, is documented. This way, our customers do not need to make repeated inquiries; they simply place an order and can then monitor the entire process effortlessly.
The Electronic Approval Authority (EAA) plays a pivotal role in this system. It contains essential details such as the customer’s name, contact information, and phone number. This data serves as the gateway to access a wealth of parameters and information about the customer. Performance is analysed to generate a continually updated score, providing a comprehensive view of their engagement.
Additionally, we have plans to integrate this platform with manufacturers directly to streamline processes further and ensure seamless communication. This brief overview provides insight into our current activities and the solutions we are developing to simplify and enhance the customer experience.
Q. What is the USP of this platform?
A. Through our platform, manufacturing possibilities become virtually limitless. Imagine being a buyer with access to only one or two nearby manufacturers. This would inherently limit your options and flexibility. This, our platform, eradicates. It empowers buyers to locate spare capacity and identify the ideal manufacturer for their specific component. They also gain insights into which manufacturers are available and performing well, and which may not be.
Then again, our scope extends beyond this. On the seller’s side, our solution is comprehensive marketing. By listing their machinery within our platform, we enhance their visibility to potential customers, effectively increasing their revenue potential by up to 20%.
For manufacturers, this means improved financials. By leveraging the platform, they can optimise their machinery utilisation. Additionally, manufacturers who are running at low capacity can benefit from new orders, allowing them to negotiate better prices. As a result, customers receive competitive pricing, superior quality, and on-time deliveries.
This trifecta of benefits – competitive pricing, high-quality products, and timely deliveries – constitutes our unique selling proposition (USP) and stands as the core value proposition we offer through our platform.
Q. What are the common challenges companies face when turning their digital designs into physical electronic products?
A. The challenge lies in the geographical constraints. When it comes to a designer or a product development company, their expertise often centres around design rather than manufacturing. These are distinct processes. Many intricate details need to be considered in the manufacturing process, especially when it involves various small components. Ideally, having both design and manufacturing under the same roof makes the process smoother. But, in our case, this is not always possible.
Another hurdle is sourcing required items like metal castings, which may not be feasible locally. We address this by facilitating intra- and inter-country sourcing through suppliers across India, enabling efficient material procurement and distribution.
Q. How does the platform help overcome the challenge of matching the customers to a manufacturer who can work according to the required specifications?
A. We encounter challenges that vary with the occasion. As we onboard manufacturers and fabricators, we understand their pain points and thoroughly assess their capabilities. We do not randomly assign designs to anyone, which could lead to delivery issues.
Take machining, for example. There are various types available, such as BMC and CNC machining. Producing a pump shaft requires a manufacturer specialised in pump shafts, not a general CNC shop. The design must match the manufacturer’s expertise and dedicated machines, avoiding fixture design, knowledge transfers, and complications.
Our platform addresses these challenges comprehensively by intelligently suggesting the right manufacturer based on design topology and geometry, preventing mismatches and ensuring seamless production. We pre-empt issues rather than resolving them post-purchase. Once a purchase order is received, we swiftly identify available manufacturers, making the process efficient and hassle-free—this is the core problem we solve.
Q. How do you manage manufacturing and logistics for international clients across borders?
A. There is a dedicated logistics team that is responsible for handling all our logistics operations. Additionally, there are valuable partnerships within our platform to enhance our capabilities further in this regard. On the demand side of our business, we collaborate with consultants worldwide and maintain a strong digital media presence, particularly in SEO, to facilitate global order placement. Our network extends to India, where we have trusted partners, including logistics experts, enabling us to offer services from ex-works to Delivered Duty Paid (DDP). To date, we have successfully served approximately eight to nine customers on a global scale.
Q. How do you select countries to focus on for your supply chain, given varying regulatory and cost challenges?
A. This is precisely why we concentrate our efforts primarily on select countries, notably the US. We choose not to engage with countries that impose exorbitant import duties or lack robust regulations. Instead, we prioritise collaboration with high-cost countries such as Germany, France, and the UAE.
Q. How do you convince potential clients to utilise your services rather than approach a manufacturer directly?
A. As you are aware, India is indeed a low-cost country, but in manufacturing, we lag behind China by about 15 to 20 years. China has solidified its position as a global manufacturing hub. The primary challenge we face is competing with China, particularly in terms of cost. Even raw material prices in China and India have traditionally attracted global buyers due to competitive pricing and timely deliveries.
Selling within India presents its own difficulties, especially for a founder. In India, cost is the paramount concern among both buyers and sellers. Indian consumers often prioritise price over other factors, posing a significant hurdle for us. Convincing Indian buyers is challenging because platforms like ours are seen as adding extra costs, given manufacturing margins typically range from five to ten per cent.
Moreover, some buyers prefer direct interactions with manufacturers and are closed to using such platforms. These are the struggles we face in pitching to buyers. However, the emergence of Generation Z offers a promising prospect. As future purchase managers in the next five to ten years, their preference for streamlined digital solutions may make our operations more accessible and efficient, helping us meet their needs with just a click.
Q. How are you managing lead times with customers and manufacturers spread all over?
A. We are successfully meeting the timeline for completion, but there is an interesting aspect to note. Suppose a customer is based in Chennai, but we are carrying out the work in Coimbatore. Similarly, we have another project for a customer in Kolkata, but we are handling it in Chennai. You might wonder how this is feasible with just one manufacturing unit. Well, the key lies in the diverse nature of each project. We deal with various project types, including casting and forging, sheet metal work, fabrication, and machining, all in different locations. This diversity allows us to manage different manufacturing activities across various cities and domains efficiently.
Q. What if a supplier fails to meet a deadline?
A. Ultimately, the responsibility for any delays falls on the customer’s side, as it stems from their oversight. If a supplier fails to meet a deadline, we take the necessary steps to ensure manufacturing efficiency. Let us say a customer requires the delivery of their first prototype component within a 10-day timeframe, and one manufacturer can only produce 2000 units in that period. In such cases, we divide the order among five different manufacturers to meet the customer’s deadline without compromising quality or efficiency.
Q. Are you also planning to diversify into contract manufacturing?
A. Yes indeed, for products like headsets and other electronic items. In addition to our existing operations, we are also in the process of establishing our own manufacturing facility to further meet the demands of the market.
Q. Could you explain how you earn your profits in this entire structure?
A. Regarding our pricing structure, we adopt a map pricing strategy, where our margins range from 10 to 20 per cent for each transaction. The pricing is variable, contingent on the specific product and manufacturing service. It takes into account various factors, such as geographic location, product type, service requirements, demand, and material availability. At times, it also includes logistics costs. Additionally, we provide extra value through services like credit cycles. Our pricing is set to match the details of each transaction, while keeping everything transparent through our platform.
Q. What is the total strength of your workforce?
A. Currently, we employ a total of 22 full-time staff members, and also collaborate with external experts and freelancers who actively contribute to our projects. In this regard, we have approximately 50 individuals working on-site. Altogether, our team comprises nearly 70 individuals.
Q. Could you give us an insight into your targeted revenue for the next financial year?
A. Regarding our revenue trajectory, we are currently approaching the half-a-million mark, with figures hovering around $500,000. However, we anticipate reaching the $1 million milestone within the next four to five months, well before 2025.
Q. Could you elaborate on your expansion plans and future milestones?
A. In terms of technology, our product is currently operational, but we are already preparing for the next version, which is slated for release by 2024. At present, we have accomplished about 30 to 40 per cent of our platform’s capabilities, but our goal is to have the platform fully developed and functional by 2024.
Geographically, we have expansion plans on the horizon. We are establishing a subsidiary in the US, marking our entry into the American market. We are also planning to set up operational offices in various manufacturing hubs across India, including locations like Jamnagar, Rajkot, Faridabad, Gurugram, Hosur, and soon in Chennai. Our presence in these manufacturing geographies ensures that we can effectively support and facilitate operations on the supply side, wherever manufacturing activities are happening in India.
