Venwiz is a SaaS-enabled B2B marketplace digitizing Capex and industrial services procurement for the manufacturing industry.
The Indian manufacturing sector is at the tipping point of a long-term growth cycle led by strong policy push, infrastructure development and a China Plus One strategy. This is now evident with the upcoming aggressive Capex plans across India Inc. and a sharp rebound in capacity utilization during FY23. A CRISIL report indicates India is likely to see INR$56B worth of industrial Capex in FY24 alone.
The Problem
Capex projects undertaken by manufacturers can range from greenfield facilities to upgradation of existing facilities, which can be further broken down into multiple activities like new equipment/technology procurement, equipment replacement, civil works (eg. cemented coal yard, pre-engineered building setup), enhancement of energy efficiency etc. Every project requires continuous engagement with multiple vendors with varying niches. These generally require manual inputs and are handled by multiple teams, leading to several inefficiencies along the project lifecycle from procurement to execution .
ENTERPRISES:
- Vendor discovery is time consuming: Identifying a vendor with the right technical and financial capabilities to successfully execute a project or task is a long lead time activity for manufacturing teams, due to high customization, complex requirements and evolving new technological needs.
- Information insufficiency: Capex projects are usually complex, entailing customization and specialization. In the absence of accessible and reliable intelligence about vendor capabilities, enterprises usually end up only interacting with their existing vendor pool, which leads to inefficient outcomes.
- Zero-pricing transparency: Since the requirements are very customized, solution pricing is subjective and not transparent. Lack of reliable price discovery mechanisms means vendors quote higher prices for projects and enterprises can’t effectively negotiate.
- Quality control issues: Require full time resources to continue QC throughout contracted period – floor managers can instead focus on core activities
VENDORS:
- Inaccessibility: Enterprise buyers at a project/job level are largely inaccessible to smaller vendors due to size or lack of relationships and leads provided by existing classifieds marketplaces can be of low relevance to vendor capabilities.
- Pricing and margins:
a. SME vendors typically white-label for Tier-1 vendors catering to enterprise manufacturers, compressing margins.
b. Benchmarking themselves against competition in terms of pricing is virtually non-existent due to customized offerings. This leads to missed or wrong pricing opportunities which eventually impacts margins. - Working capital: Tranched payments and long completion cycles create working capital constraints, which limits capacity utilization.
- Growth and Scalability: Most vendors grow to a certain size and plateau upon obtaining a few key clients, largely due to low access to new client bases and working capital constraints.
The Solution:
Venwiz is a SaaS-enabled vendor discovery and engagement marketplace designed specifically for enterprise scale manufacturers. The platform is democratizing Capex and industrial services procurement for enterprises by providing access to a diverse pool of vetted vendors. Procurement and project managers gain access to a filtered and curated set of high relevance vendors shortlisted by the Venwiz platform after matching a job’s requirements with the capabilities of a vendor. The company has further developed a set of automated tools to assist managers across the life cycle of Capex projects including tools to track execution and vendor milestones.
This enables enterprises to slash vendor discovery TAT, acquire previously undiscovered high-quality vendors and obtain real time visibility into the processes. A higher pool of qualified vendors also means improved price discovery.
The platform holds the potential to fill the Capex procurement gap and realize major cost savings for market participants.
A market ripe for disruption:
Led by strong macro tailwinds, India is poised to see an upward Capex cycle over the next few years. With this heightened activity, manually run processes and systemic inefficiencies can create significant roadblocks to expansion plans. Streamlined workflows will be of strategic importance to enterprises to benefit from the growth cycle. Due to the nature and cycle of Capex by manufacturers, the ecosystem remains disjointed between the supply and demand side, leading to high TAT, suboptimal output, and increased costs. Traditionally run so far, the market is ready for a technology led transformation.
While enterprise scale manufacturers in certain sectors have structured processes and established vendor network for core Capex activities, they still face inefficiencies in non-core services which are estimated to be 40% of the total Capex incurred by corporates. Venwiz platform can be useful for both core and non-core services depending on the enterprise needs and vendor availability.
Venwiz continues to onboard over 1,000 vendors monthly, creating a deep-diverse set of supply side pool. The platform is further witnessing strong adoption from enterprise manufacturers, having already added industry leaders in pharmaceutical APIs, auto ancillary, power and FMCG industries. Seamless workflow from vendor discovery to project execution will enable time and cost optimization for enterprises, while ensuring business expansion for vendors. We believe that this effortless procurement experience for enterprises and ability to address growth and finance challenges for vendors will ensure stickiness to the platform over time.
The founders – Rajesh Reddy and Sandesh Paturi – come with substantial experience in Capex procurement operations and manufacturing projects, having witnessed key problems first hand. The founders are backed by an experienced management team with specialization in key functions of the business.
At Sorin, we believe the Venwiz team is perfectly poised to address the gaps in the system and revolutionize the procurement of industrial and Capex services.
For further details on Venwiz, visit https://www.venwiz.com/
To speak with our Sorin team, contact harshita@sorininvestments.com