Can you explain in layman’s terms what Fractory does?

Fractory is a digital marketplace that connects engineers to manufacturers and automates the time-consuming and tedious process of industrial procurement. Typically, engineers email their designs to several manufacturing companies that manually calculate quotes with various software programs. Moreover, each company has its customary practices that you need to adjust to accordingly with each application.

Fractory is the same age as sTARTUp Day, turning six next year. How was the idea born and how did you meet your co-founders Joosep Merelaht and Rein Torm?

I worked as a mechanical engineer for five years, and besides engineering tasks had to handle procurement. In my last job, I spent on average, a day a week glued to the phone and email, looking for manufacturers. At some point in 2016, I vented my frustrations to Joosep in a pub one evening, and the idea for Fractory started to form.

Joosep and I had played in a band together for a few years; at the time, he was working in software sales in Messente. I knew Rein through friends since high school. He was working as a software developer in Skype but was thinking of doing something independently and joined us in 2017.

What has been the pandemic period been like for you?

It’s been tough for us, just as it has for anyone, I guess. We had planned to raise a bigger round in Spring 2020, but this fell through, as the timing was horrible for financial markets. On the other hand, the pandemic proved the value of our solution to our customers and manufacturers.

We were able to solve problems for a lot of companies where they had actually got stuck themselves.

So, there was a conflicting reaction from the market: on the one hand, everyone understood the need for digital solutions; on the other hand, many companies switched to survival mode. As a result, we got a boost of inspiration ‒ but expansion became harder.

You recently announced raising 7.5 million euros from investors. How will you use it for your growth?

First, we’re going to use it for expansion in our current markets as well as in new countries. We’re planning to add the US, France, and Italy, and expand in the Nordic countries.

Secondly, we’re going to develop the product range. Until now, we’ve offered a limited range of services that, though used in most companies, don’t cover all their outsourcing needs. Our goal is to add new services such as CNC milling and turning, and next year we hope to add industrial 3D printing.

Fractory’s journey seems like a straightforward success story. Despite this, surely there have been some challenging moments along the road?

I think it’s important to stress that behind prizes, investments and glamour is constant hard work by the entire team. We have not made huge mistakes, but nothing has come easily

Fractory’s headquarters are located in Tartu. Has it not hindered your growth opportunities ‒  for example, in investors’ eyes?

From my perspective ‒ if you need to fly to a new city each week, doing it from Tallinn would save 2+2 hours each time. It’s not a substantial hindrance, but flights from Tartu Airport would make life easier.

I actually see it as a strength that we can take people from Tartu and are not limited to Tallinn. However, when a company grows, you may reach a point where you simply have to expand. We’ve just opened an office in Tallinn, too.

Did you become an entrepreneur by chance, or was it always your goal?

I guess it has been intentional, after all. For example, in my high school yearbook, I wrote that I want to be the owner of an architecture bureau in ten years. At the time, my goal was to become an architect, though eventually, I went to study mechanical engineering at Tallinn University of Technology, which was actually a more logical choice for me.  

I have never desperately searched for a business idea with the sole purpose of creating my own company. But I’ve always been prepared for that to some degree. I’ve progressed very fast in my jobs and observed what managers do and what to pick up from them.

What excites you about the future?

We’ve set ourselves big goals with Fractory, but my dreams tend to be short-term: the kind of dreams I can actually strive towards. So, the goals mentioned above ‒ expanding to new markets and finding more great people to join the team. And that Fractory would be a cool place to work in in the strict sense of the word. There's no chance of anyone in the team stopping outside the front door in the morning and thinking, “Heck, I don’t wanna do this"!

How do you create such a work environment?

I don’t know fully, but it seems to me more and more that you create this sort of environment with openness and sincerity on all company levels. If everyone knows in and out what is happening in the company or at least can find out, and everyone is as honest and sincere with others as they can be, the rest of the good stuff follows from there.

It’s my task ‒ and in fact, the task of anyone already in Fractory ‒ to pass on these values, and ensure that when departments grow bigger, and you cannot meet all the colleagues anymore or learn all their names, the same spirit would still prevail.

Read the interview in Estonian here. foundME is the official media partner of sTARTUp Day 2022, bringing to you top stories of the festival and Estonian startup community.