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Knowde Raises $72 Million On Its Journey To Bring The Chemicals Market Online

This article is more than 2 years old.

The chemicals industry converts raw ingredients to the basic products essential to every other industry — from cosmetics to cars to pharmaceuticals — despite remaining mainly out of the minds of consumers. But to Ali Amin-Javaheri, it’s his entire career. “It’s a really fascinating market that most people don’t spend a minute of their lives thinking about,” he tells Forbes. “It’s one of those markets that lives in the shadows, and doesn’t touch us directly, but consumers and most people don’t realize that chemicals are used to make every physical good on earth.''As the child of a DuPont chemist, Amin-Javaheri grew up in the space before entering the market himself. Despite the market’s size, an estimated $3.9 trillion of revenue in 2019, how buyers interact with it hasn’t changed all that much since his dad’s days. Amin-Javaheri aims to fix that. “It’s massively fragmented and the current buying experience is really as inefficient as you can imagine,” he says.

Amin-Javaher knows how difficult it is to bring a legacy industry into the digital age— he was part of a team at ChemPoint that tried to do what he’s created now and ended up as more of a middleman distribution platform. Because of this experience though, he was able to give it another go in 2017 and created Knowde, a modern B2B marketplace for directly connecting buyers and sellers in the chemicals industry. Since launching with his cofounder Wojciech Krupa, the startup has signed on thousands of the estimated 15,000 potential suppliers. Given the growing global appetite for the service, the startup raised a new round of capital to keep going. 

The San Francisco-based company raised a $72 million Series B round led by Coatue, with participation from other new investors including Sound Ventures and Mantis in addition to existing investors like Sequoia. Shaun Maguire, a partner at Sequoia, who led the firm’s Series A in May 2020, tells Forbes that he was originally excited about the company because it was tackling a sector that was the perfect fit for a marketplace model due to its size and fragmentation. He says he came back to invest in the Series B because he’s been impressed by the company’s progress. “Ali just had this incredibly clear vision of how he was going to get started and that got us very excited,” Maguire says. “They basically have done everything they said they would do and the number one thing the company has been focused on is indexing and getting as many users on Knowde as possible.”

The first step for Knowde Amin-Javaheri says was just getting information about the different sellers online, something that hadn’t really existed. The industry is largely still trapped within PDFs which means buyers are typically going back and forth with sellers for months just to get an idea of the different things they had, let alone request a sample or make a purchase, he explains. “What we say internally is ‘how do you get it down to 12 days?’ We have to put every product on the platform, and be able to apply basic search filters, so [customers] can go from 100,000 [sellers] to the right seven really quickly.” Once this was in place the company worked to add more features like marketing tools for the suppliers and the ability to make the transactions online. 

Knowde has brought approximately 20% of chemical suppliers on to the platform thus far, and so far the focus has mainly been on North America and Europe. Despite originally thinking this would be a solution more designed for smaller buyers to get a feel for the market, the platform has seen strong traction from large groups like Unilever too. Amin-Javaheri says his startup will use the fresh capital to expand its geographic reach and continue adding more suppliers. “The way that innovation happens is through chemistry, if you want to innovate faster and get the right ingredients, you have to be able to find the right suppliers,” he says. “We take a lot of pride in the fact that essentially we’ve built the Google for chemistry.”

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