The transaction is a mix of cash and equity, people aware of the discussion told ET.
The acquisition is largely in line with plans to bolster Zetwerk’s presence in the US, Mexico and Europe, as well as to help it increase market share in the renewable manufacturing segment.
As part of the transaction, the executive team of Unimacts, including chief executive officer Matthew Arnold, chief financial officer Andrew Woglom, and chief operating officer Alan Hays, will join Zetwerk.
“We have been addressing the US market by largely being in India. We want to be closer to the market now. Of course, we have reached success with international geographies contributing 10%-15% of our (revenue) mix and we want to increase that. The Unimacts acquisition is largely to expand our presence in the US,” said Amrit Acharya, cofounder and chief executive, Zetwerk, in an interaction with ET.
Acharya added that Zetwerk is looking to increase international revenue to 25-30% of total revenue over the next two fiscal years. Currently, the US market contributes almost 70% of the firm’s international revenues.
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The acquisition will equip Unimacts with the necessary capital, while giving it an opportunity to serve the India and Vietnam markets.
For Zetwerk, renewables continues to be a key segment since it contributes roughly 15% of its overall revenue. With the Unimacts acquisition, the company is expected to double down on the space.
“Unimacts today serves more than 50% of tractor companies globally, and more than a quarter of the companies serving wind turbine sales. It also serves almost a third of all solar developers,” Acharya added.
The acquisition comes on the heels of Zetwerk
announcing three acquisitions in June for Rs 100 crore to strengthen its industrial vertical business in the oil and gas, aerospace, defence, and infrastructure component segments.
Zetwerk had acquired Pinaka Aerospace Solutions for aerospace and defence manufacturing capabilities, bagged a majority stake in SharpTanks to increase its exposure to the oil and gas industry, and bought a 100% stake in the Wardha fabrication unit of Wheels India to tap into the manufacture of critical fabricated parts for power, roads, and railways.
“Over the last decade, we have been working to scale our global supply chain and contract manufacturing businesses to better serve customers throughout North America and Western Europe. Partnering with Zetwerk will allow us to accelerate our growth and global reach and provide more comprehensive solutions to our customers,” said Unimacts CEO Arnold.
In September, Zetwerk
said that its revenue jumped six-fold to Rs 4,961 crore in FY22 from Rs 835 crore in FY21. Overall losses remained largely unchanged at Rs 42 crore, factoring in a non-cash employee stock ownership plan (Esop) expense. Zetwerk reported a total loss of Rs 41.2 crore in FY21.
Total gross merchandise value (GMV) in FY22 also grew six-fold to ₹5,718 crore from ₹951 crore in the year-ago period.
The revenue increase was on account of revenue growth in the consumer manufacturing business and from its international clients, Acharya had told ET then.
Zetwerk now claims it will touch $1 billion in revenues (over Rs 8,000 crore) in the current fiscal year.
Founded in 2018, Zetwerk is a managed marketplace for contract manufacturing. The company partners with industrial and consumer enterprises to get their products manufactured via a global network of small manufacturers.
In December 2021, Zetwerk raised $210 million in a round led by Greenoaks Capital. That was its third major equity fundraise last year, valuing the startup at $2.7 billion. Earlier in 2021, it had raised $150 million in a round led by D1 Capital, which valued the startup at $1.3 billion — pushing it into the Indian unicorn club (startups valued at $1 billion or more).