Figuring that small and midsized business need more help in finding buyers and suppliers than big companies, Kinnek formed two years ago as a business-to-business online marketetplace. Now, having helped to connect thousands of companies and flush with $10 million in new funding, it’s planning to step up its marketing campaigns and investment in technology.
“Our vision for Kinnek is to become the platform where SMBs find suppliers, manage all their purchasing, and maintain their supplier relationships,” says CEO Karthik Sridharan, who co-founded the company with Rui Ma. “Our goal is to build a marketplace that empowers small businesses to find suppliers as easily as their larger counterparts.”
Sridharan and Ma say they target a market of 4.7 million small and midsized businesses in the United States that represent some $2.2 trillion in annual spending on supplies and equipment. Kinnek’s marketplace participants, they add, include restaurants, hotels, bakeries and beverage companies. “Hundreds of millions of dollars in purchase requests have been created on Kinnek this past year, and we’ve been seeing a 30% to 40% compounded monthly growth rate in our headline metric, dollar value of deals handled by the platform, since January 2014,” Sridharan says.
Kinnek announced yesterday it had received $10 million in a Series A funding round led by investment firm Matrix Partners, which has also invested in such e-commerce and technology companies as Apple Inc., Gilt Groupe, Netezza and Sycamore Networks. Other investors participating in the Series A funding round include Sierra Ventures, Version One Ventures, Naval Ravikant, CrunchFund, Richard Chen, TriplePoint Ventures and Benjamin Ling. That brings to $13 million Kinnek’s running total in venture capital, Sridharan says.
“Kinnek is busting open a dramatically underserved market by filling a void with a simple, transparent solution,” says Josh Hannah, general partner of Matrix Partners, who has joined the Kinnek board of directors.
Kinnek is free to use by buyers. The company earns its revenue from suppliers, who pay a combination of sales commission and a subscription fee, Sridharan says. He declines to be more specific on commission rates or subscription fees.
As buyers enter information on what they want to purchase, Kinnek uses algorithms to match their request with what is available from suppliers and alerts them when new products become available that might meet their needs.
“Not only has working with Kinnek saved us countless hours, it has also saved us hundreds of dollars,” Susie Griess of Griess Family Brews in Grants Pass, OR, says in a statement Kinnek released about its new funding.
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