Singapore-based Arcstone, a data analytics and operations venture for manufacturing plants, has secured its first round of funding from Tokyo-based venture capital (VC) firm Global Brain. This Series AA round also saw Wavemaker Partners, 500 Startups, and YSS Capital participating.
In an interaction with Tech in Asia, CEO and founder Willson Deng disclosed that they had received the funds in full and planned to use it for scaling the firm, saying, “Funds will be allocated towards two key areas: continued software platform development and building our presence in the manufacturing world to secure customers throughout Southeast Asia.”
Deng told Tech in Asia that as part of their expansion they plan to hire “…regional experts in manufacturing and software developers that are familiar with enterprise level coding. It is a niche area so we are keen on bringing in exceptional talent to train but we’ll only be keeping the best.”
Incepted in 2013 with a minor round of angel funding and driven by Deng’s background in industrial engineering, the Singapore-based firm has managed to bootstrap since then and generate revenue from deploying and validating its solution, which streamlines manufacturing processes in factories. This round of funding is growth capital they intend to accelerate their expansion, due to the slow pace of organic growth.
Their solution(s) enables production operators to gain access to data analytics, allowing manufacturers to review and optimise processes. It also grants them greater operational control and visibility.
Asked whether he viewed his product as something that fit the paradigm of a disruptive innovation, Deng told DEALSTREETASIA: “The Arcstone Platform arc.ops was intended to change the way manufacturers look at solutions for production improvement. The industry has traditionally been very conservative with solution sets being extremely cost ineffective and difficult to operate, scale and adjust to rapidly changing production demands.
He explained: “arc.ops looks to change that with a flexible, modular and open system for integration across hardware and software solutions. This provides manufacturers with solutions from the best of the best in their respective areas that are integrated and work seamlessly to help improve quality and reduce costs throughout the manufacturing enterprise.”
He explained this as an an elimination of the “…the jack of all trades and master of none syndrome…” while ensuring that manufacturers would be able to access a solution that enable what he termed a “masters of all” approach. This approach was adopted in order to solve the fragmented nature of manufacturing solutions on the market.
Takashi Sano, the principal at Global Brain, said, ““Arcstone is solving critical pain points for manufacturers. Global Brain has the manufacturing experience to not only validate and financially support, but also to help propel Arcstone’s business forward.”
Deng elaborated that with the robust manufacturing space in Singapore and phase of maturity, operational efficiency and process optimisation were necessary to maintain and sustain a competitive advantage regionally.
According to Deng, Arcstone has collaborated with agencies and organisations like SPRING, the Economic Development Board, and SIMTech to provide insights on growth and competition to small & medium enterprises (SMEs) and large local enterprises (LLEs) in the city-state. He also expressed that growth in Southeast Asia would be robust.”
In email communication with DEALSTREETASIA, Deng shared his difficulties in acquiring technical talent for Arcstone, saying: “Arcstone is in a fairly niche area where we are looking for manufacturing engineering and operations talent with a bent on new ideas, new solutions and new methods for productivity and efficiency improvement through software.”
“The talent pool for this type of talent is already low around the world but in Singapore it has been very difficult to find. We are looking for data savvy engineers and developers who have practical experience from the manufacturing floor that can help develop solutions that can provide immediate value and power to the end customer”, Deng added.
He explained this was different from hiring a data scientist, due to the “…added requirements and responsibilities to identify solutions to operational issues and find ways to collect data where there currently is none”, noted that there was a need for front line engineers in his venture and the manufacturing space as a whole
Asked to comment on whether Arcstone would establish Taiwanese operations, given recent developments and Taiwan’s key role in the production and supply chain in the Asia Pacific, Deng told DEALSTREETASIA: “Arcstone sees important value across Asia as the need for continued manufacturing improvement is not just in Taiwan but in China, Singapore, Malaysia, etc.”
He elaborated: “Countries in Asia see manufacturing as an important pillar in their respective economies and in the region. From Arcstone’s prospective we feel that we can bring strong value to not just individual manufacturers but to large scale initiatives and programs, government or corporate through our platform.”
Deng added, “With the closing of this funding round, Arcstone will be able to reach out further and become more active in areas outside of Singapore and to bring the same level of support, innovation and benefits to companies around the world.”
In a more in-depth discussion, Deng also noted that there was a crucial need to build and maintain a “data-driven manufacturing ecosystem” capable of competing with regional players, especially in the context of emerging manufacturing ecosystems like Vietnam and other manufacturing successors to China.
Deng opined: “Singapore has unique strengths and weaknesses when it comes to the manufacturing industry and in light of these elements, Singapore will need to maneuver carefully in the coming years to ensure it maintains an edge.”
Commenting on future innovations in the manufacturing space, and with a focus on the context of Arcstone, Deng said, “The need for flexibility and ease of use will always be a big challenge in the manufacturing arena and it is a space that is ripe for innovation.”
He added, “From hardware to software, solution sets to help manufacturers visualise, control and improve operations will always be in demand and we at Arcstone hope that we can help support and grow these types of solutions through a common and integrated platform and ecosystem for continued manufacturing improvement.”