Tech2B: the new marketplace for manufacturing
Most people don't realize how machines, that make everyday products, are actually made. But machinery is indispensable for every part of, for example, a coffee machine, or even when making a simple can that you drink a soda from. These machines are made of components which sometimes break down. And when new machinery is built, it needs new components.
“Suppliers that make these types of parts are often highly specialized and not that big”, says Paul Wouters. He founded the company Tech2B together with his brother Dirk and IT expert Sjors Hooijen. According to Wouters, in total there are 60,000 of these types of manufacturers in the Netherlands. Of those, 27,000 are specialized in making steel parts of machines. 26,000 of which are SMEs that have less than one hundred employees each.
The end of administrative burden
All those companies have to process their orders and they often do that by filling out a form on the web portal of the company. The further process is then handled via emails. A time-consuming process as your name, address, amounts, technical drawings, specifications, parts, and so on all have to be added to the computer system with each new order. Wouters' brother, Dirk Wouters, had to deal with that as the owner of a company in Bladel, the Netherlands, where all three founders of Tech2B are from. He asked Hooijen to help him come up with a solution in order to avoid unnecessary tasks. The result is impressive. Tech2B’s platform works a bit like e-Bay or Marktplaats, the Dutch equivalent. A buyer or seller of a company places an order whereby they offer or request a product. Buyers and sellers from the manufacturing industry affiliated with the platform are able to respond to that. All the users of the platform have registered themselves. If a buyer purchases a product via the platform, the platform issues the invoice, and this also appears on the screen of the person doing business via the platform. Administrative tasks are resolved quickly this way. Doing business is quick and transparent. If a company uses Tech2B for its standard purchases and sales, there is no risk of coming across any administrative records or tasks on an employee's PC that no one else has access to. If all employees use Tech2B, the company gains a good overview of the purchasing and sales processes without this requiring too much work or time.
Funding for start-ups
Still it was difficult to attract investors, even after a round of interviews with companies in the vicinity had expressed that they could benefit from Tech2B's automated order system. But this was needed to take the product to the next phase, Wouters states. "The investors we spoke to thought that the risks involved in this early phase of the company were too high. Or they wanted a large stake in the company in return." It was only in early 2020 when they spoke to Brainport Development, the economic development company of Brainport Eindhoven, that the development of Tech2B gained momentum. "They provided us with a start-up coach and introduced us to the Brabant Startup Fund. In order to qualify, we had to deliver a presentation and arrange an expert panel.
This resulted in a subordinated loan of €200,000, of which they received the first tranche in June. Repayment (with interest) is only due when they earn revenue. There is also an option to convert the loan into shares.
Huge commercial network around Eindhoven
But money and support were not the only things Brainport Development offered Tech2B. "The Brainport Eindhoven region is currently one of the high-tech hotspots in Europe, with companies that are global market leaders in their segment and who want to digitalize their business. Brainport Development has contact with large companies such as VDL and ASML, for instance. But with plenty of smaller companies too. This meant that we became part of a large network, which makes it easier for us to gain access to them." This was crucial for the marketing of Tech2B's product. After all, without any customers, there is no market.
Approximately 300 companies are affiliated right now, according to Wouters. Most of them are in the Eindhoven region. "Our goal is to integrate the supply chain of the Dutch manufacturing industry. An ERP system is too expensive for most companies. This is a system that companies use to regulate and automate their business processes. Tech2B is therefore a godsend for SMEs in the manufacturing industry.”
The platform is taking off
As soon as Tech2B went live, the platform gained traction. No surprise here. In the first place, because there was a need for it. And also, because Dirk's company was not the only one that wanted to get rid off the administrative burden of handling minor paperwork and the task of sending invoices manually by e-mail. Secondly, because participation in the platform has been free so far. This means that no revenue has been generated as yet. "But this will change next year," Wouters adds. "We explained that companies could use the platform for free during the first year." Customers can subscribe as of January 2021. The price range of the packages that Tech2B will be offering is lower than the price of the standard ERP systems on the market.
Any competition?
At the moment there doesn’t seem to be much competition in this area. There is a company in Austria, called OrderFox, and a company in Germany, named TechPilot. The difference is that they offer nothing more than what e-Bay is already offering: an ad to promote a product. You have to handle everything else yourself via e-mail or phone. Then you still end up having the same administrative burden as before. When everybody uses separate, stand-alone ERP systems, you don’t achieve efficiency. An advantage for the supply chain is that they all use the same system.
Companies that want to join the Tech2B system, either to place or fulfill an order, can register via their website.
