In February 2017, following months of meticulous research into the inefficiencies of the chemical industry, we announced an investment in a little-known company called Knowde, which was just setting out to transform the way chemicals are bought and sold.
At the time, the check Bee Partners wrote to co-founders Ali Amin-Javaheri and Wojciech Krupa was their first, representing a seminal moment in the fledgling start-up’s inception.
This move on our part represented the confidence we had in the founders’ clear vision and industry expertise.
Amin-Javaheri, the son of a DuPont chemist, has spent a decade observing the industry from his vantage point in technology and sales at ChemPoint, where he helped build an early online chemical sales mechanism.
He knew from this experience Knowde couldn’t just take the chemicals marketplace online. It needed to give buyers the ability to more quickly and easily find and research chemicals in the first place.
It was a bold vision for an industry that generates almost $4 trillion in annual revenues and impacts more than 25 percent of global GDP, but has relied on field sales teams, catalogs and other traditional marketing tactics for over a century.
Five years on, however, that insight and vision have paid off.
Knowde is now the largest marketplace of its kind, boasting more than 100,000 products and thousands of producer storefronts — more than any other distributor, marketplace or middleman organization in the history of the industry. And it recently expanded its presence to cover every major industry vertical.
On the back of this growth, we recently sat down with Amin-Javaheri to find out what’s next for the company and the industry as Knowde leads the market into the digital era.
Congrats on landing Coatue. How will you use this new capital to grow the business?
We’ll continue to build out supply-side and buyer-side features like workflows and tools to encourage activation and engagement on the platform. One example is quote management. In the consumer world, there is no concept of this, there are just on-spot purchases. In the industrial world, everything is done through quoting and one-off prices. Quotes are active for only a period of time and you place orders against a quote. That’s not a business process you can change and so you have to build features to support it.
And second, we’re finally ready to build up our commercial engine. To date, all our growth has happened organically through search and other mechanisms. Now we’ll begin marketing. We have not hired a single marketing person in our organization until now.
What market dynamics are you facing as you bring large producers onto the platform? What are the biggest challenges and opportunities?
To date, the chemicals market is still almost completely offline. The concept of connecting with your customers online and taking them through an online buying journey is completely novel in this industry. The need is there. Both buyers and sellers would love to find more efficient, easy ways to buy and sell, but it’s never been done. There is a lot of education that needs to be undertaken, and a lot of features that need to be built to meet the need. B2B marketplaces are extremely complex. It's not as easy as dropping something into a cart and checking out.
There are a good number of business processes that you’re not going to disrupt. At the end of the day, you have to move product from point A to point B. You're not going to disrupt an entire supply chain… you just have to find a more efficient way to do it.But there are other things you can disrupt.
Can you explain what the knowledge graph is, how it works and why it’s valuable?
There's a lot of “unstructured” information in the B2B world. A lot of information resides in documents, PowerPoints, and people’s heads. A knowledge graph structures this information so knowledge becomes more connected and understood.
When you go to Google and type in your favorite actor’s name, Google understands who that is and it tells you about many different facets of that person. That's what we’re doing — taking a lot of information on chemical entities that hasn’t been surfaced before in order to provide a more complete picture of that entity.
By searching for a particular chemical on Knowde, you can surface what it is, why you should use it, and what its properties are. If you wanted to find all that knowledge today without Knowde, you’d have to go to 15 places and conduct hours of research. We’ve structured and aggregated it all in one place.
About Bee Partners
Founded in 2009, Bee Partners is a pre-Seed venture capital firm that partners with revolutionary Founders working at the forefront of human-machine convergence across technologies that include robotics, AI, voice, i4.0, and synthetic biology. The firm leverages a singular approach to detecting new and emerging patterns of business as well as inside access to fertile but often overlooked entrepreneurial ecosystems to identify early opportunity in large, untapped markets. Bee’s portfolio companies consistently realize growth at levels that outstrip industry averages and secure follow-on capital from the world's top VCs.