Photo: Kinnek co-founders Karthik Sridharan and Rui Ma (via Kinnek)
Kinnek, the online marketplace that helps small business find equipment and supplies, has raised $20 million in a Series B funding round. The funding was led by Thrive Capital, whose Managing Partner, Josh Kushner, will join the Kinnek board.
Kinnek CEO Karthik Sridharan told Built In NYC the $20 million will be used to expand into new markets and grow the team beyond the 30 current employees currently working at the midtown New York office.
Sridharan founded the company with COO Rui Ma in 2012 when the pair were sitting in a Flatiron building cafe wondering where the owners sourced their equipment. What they discovered was a real pain point for small business owners — finding custom suppliers quickly in a way that doesn’t take all your time and focus away from the core business.
The online marketplace uses an advanced algorithm to match requests from buy-side small business owners to Kinnek’s database of suppliers. “We take into account a lot of different factors, from exact product specifications, to geographical location, to things like budget and quantities”, Sridharan said.
Once a request is lodged the supplier is immediately notified and can send back a quote within minutes and both parties can then negotiate for a price directly on the platform.
“Suppliers are able to get quotes back to customers much more quickly via connect than otherwise because we only notify them (using the matching algorithm) of the most relevant requests that we know they’ll be able to cater to.” he added.
The small business buyers get access for free and the suppliers pay a hybrid of part broker fee and part commissions when they make sales on the platform. Sridharan said the pricing has worked well with suppliers because they’re used to similar models in offline transactions.
Kinnek already has more than 20,000 buy side customers and around 2,000 suppliers signed up across all 50 states and all Canadian provinces across a range of industries from food processing companies to wineries, restaurants and coffee shops.
Kinnek was a graduate of the AngelPad Fall 2012 class, but Sridharan always intended on bringing the business back to New York, where both he and Ma had been living. “We love building a company in New York”, he said. “It’s a great city for talent, the people are hard working, they’re smart, they have that go-getter attitude, that’s suited to startups."
Earlier investors including Matrix Partners, Sierra Ventures, Version One Ventures, and Angelpad, as well as individual investors Naval Ravikant and Benjamin Ling, also participated in the round.