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Diagon

Diagon is on a mission to radically simplify the procurement process by building a next generation platform for automated sourcing of manufacturing equipment. 

As Techcrunch reported yesterday, Diagon’s platform allows customers to identify relevant equipment products, instantly discover qualified suppliers, and manage their complex equipment projects. By doing so, Diagon creates significant time and cost savings for customers by accelerating equipment spec definition and the negotiating process (which can help customers achieve favorable commercial terms comparable to that of a Fortune 500 enterprise). On average, Diagon is saving manufacturers 30 or so days over the course of a 12-month project and over $250K in costs.

In the world of manufacturing equipment procurement, the process of sourcing suppliers and purchasing goods (think: identifying and onboarding suppliers, gathering quotes, negotiating prices, and managing everything from contracts to business spends) still relies heavily on the use of spreadsheets, the modern-day rolodex. 

For all of Excel’s finer points, an efficient and effective foundation for procurement it is not. Manual data entry and formula editing are expensive and time-intensive activities, a veritable crucible for human error. And, as an organization grows and its procurement processes become more complex (managing hundreds of purchase orders and tracking deliverables from a multitude of suppliers), Excel becomes all the more clumsy and cumbersome, lacking the agility necessary to securely manage modern workflows and scale alongside a business as it grows.

In fact, the reality of heavy machinery procurement is that most busy supply chain managers and heads of procurement simply don’t have the bandwidth to familiarize themselves with the entire universe of relevant suppliers, and are therefore left to overpay for equipment. On top of that, procurement managers often struggle to keep track of deliverables as suppliers go about the process of building, testing and shipping equipment, leading to unforeseen delays and costs.

All told, these pain points present a significant burden to manufacturers. They also represent an area of enormous opportunity for automation and digitization. In 2023 alone, manufacturers sourced roughly $300 billion dollars worth of industrial machinery and equipment.

These are just a few of the reasons why we are so excited to be investing in Diagon.

Diagon was co-founded by Will Drewery, a well-known, highly credible leader in the world of supply chain and procurement. Will formerly helmed procurement at Tesla where he oversaw $700M in volume per year in CAPEX procurement. As CEO, Will will be instrumental in these early days of customer acquisition, where his stature as a leader and innovator in the industry will contribute significantly to Diagon’s overall right to win.

Will is amply supported by co-founder and CTO Shri Muthu, the former Head of Engineering at Snackpass, who led that team to a 10X increase in GMV.

For now, Diagon’s starting focus is on heavy machinery procurement, which includes equipment categories like auto-guided vehicles, stamping presses, casting machines, industrial automation robots, injection molding machines, conveyors and more. This is on its own a considerable market (the global heavy machinery market was valued at $170B in 2022 and is expected to grow to $211B by 2029). However, we see a huge opportunity for the platform’s future horizontal applicability, along with the additional of all manner of financial services products. Diagon’s workflow automation and price negotiation IP can be applied to any segment of the procurement world, not only heavy machinery, and there is room to add BNPL, trade finance, factoring and more.

In order to drive price savings through economies of scale, we do believe it will be important to stay focused early on with Diagon’s immediate supplier network. But if Diagon can continue to broaden their network of suppliers and execute on their product roadmap to ensure that their platform is applicable to the widest possible range of manufacturers, the total opportunity for the company is massive.

Note: Check out the original article on the website of Foxe Capital, a sub-adviser for Anthemis