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It’s not everyday that you get to sharpen your skills with Elon Musk as your boss. It was while sourcing manufacturing equipment for Tesla factories that Will Drewery drew inspiration for Diagon, a startup that helps manufacturers procure equipment.
“Big projects companies are building now, like battery manufacturing, need very specific types of process equipment and automation equipment to build a factory and automate,” co-founder and CEO Drewery told TechCrunch. “I’d been hearing and seeing the trends toward nearshoring and reshoring of American manufacturing. As a supply chain manager, I’ve been taking a critical eye at how that’s actually going to happen. People intuitively understand that they want to source batteries for the cars they’re making in the U.S. or near the U.S., but they have no idea if that capacity doesn’t exist anywhere, then there’s no way you’re going to find a qualified supplier or have the right infrastructure to make those products.”
In January 2023, he started Diagon with former Snackpass vice president of engineering Shri Muthu so that companies of all sizes could tap into his expertise of having sourced equipment for Tesla’s electric vehicle and battery facilities. Companies in fields like automotive and aerospace can identify qualified suppliers from Diagon’s network of equipment suppliers, system integrators and service providers, then leverage a toolkit to manage those complex projects.
Diagon also uses artificial intelligence to get answers to questions like, what type of infrastructure will companies need in order to become a qualified iron-based battery provider in the U.S.?, or what types of things will the company need in order to make those products?
The journey to Diagon for Drewery, who spent most of his career as an equipment buyer, started in Pittsburgh. When Drewery was growing up, his father and uncles worked in the steel industry. It was a “great way to make a living for a long time” until globalization shifted manufacturing centers elsewhere, he said.
“It impacted me to see not only the industry, but the businesses that supported it, being affected,” Drewery said. “I had this intuition that there was a much bigger significance to being able to manufacture to support a local economy.”
A few years later, Drewery joined PwC as a consultant before joining the U.S. Department of Defense as a contractor. This position took him to Baghdad, where one of his projects was to help companies procure machinery and equipment to rebuild facilities damaged during the war.
After graduating from business school in 2012, Drewery moved to the Bay Area, where a friend told him about Tesla. The company had just bought an old factory in Fremont and was stripping out the old equipment and needed someone to help source new equipment to make the Tesla S, X and 3 models.
His friend brought a Tesla to a party Drewery was at, and after taking joy rides up and down the freeway, Drewery recalls thinking, “I don’t know what this company is doing, but I’ll do anything to work there.”
Tesla, Drewery learned, was similar to most organizations when it came to the supply chain.
“They’re not really focused on buying the infrastructure for the factory — that tends to be left to engineers and other people within the organization,” Drewery said. “When I came in, I was the first person, really the first formal buyer, the company ever hired to source this type of machinery and equipment. Up until then, the engineers and shop managers were sourcing their own stuff.”
It was Drewery’s job to source all the industrial robots, the metal presses and plastic molding machines. That grew into sourcing for the entire scope of Tesla’s manufacturing footprint, both in Fremont and Buffalo, New York, and also in the gigafactory in Reno, Nevada.
It was quite an education, Drewery recalls. It was difficult to identify suppliers and where they were located. How to pay for those materials, and how to actually source everything. This is because a lot of the equipment didn’t fall into the norms of things that most supply chain managers buy, he said.
Diagon dashboard shows supplier discovery feature for battery equipment. Image Credits: Diagon
Drewery ended up getting a crash-course education in supply chain. He learned which suppliers made which type of equipment, all the pricing, lead times and other negotiations.
Also during this time, Drewery gained experience building out a pretty substantial team to tackle all of that. He grew his team to 30 people that was managing about $700 million a year in capital expenditure, Drewery said. During his time at Tesla, that was about $3.5 billion.
“One of the coolest jobs — hands down — that I’ve ever had, and I was awestruck at how few tools there were to help me do that job,” he said.
And what was it like working with Elon Musk? “I’ve never learned more than I learned in that role, but it was the hardest thing that I’ve ever done. Up until starting this company, I’d say that,” Drewery said.
Here’s a little sample of what that involved. Trade shows are the top place to find companies that make these types of equipment. However, how do you take off a day of work to attend conferences when your boss is Elon Musk?
“A lot of times I would have to do it under the radar,” Drewery said.
Drewery worked at Tesla between 2013 and 2018. During that time, he also had to manage delivery of all of that equipment and the testing and installation of it. This could take anywhere from a few months to a few years, he said. Drewery had a substantial team working with him but thought much about companies that don’t have the team or tools to do the same.
“This is why I felt the market needs a Diagon,” Drewery said.
Diagon launched its equipment sourcing and procurement platform in November 2023 after being a part of startup accelerator Techstars. It grew to six employees and a half-dozen customers, including Mitra Chem, Zeno Power and Mighty Buildings.
The company will deploy its software platform as a pilot program with its professional services customers first and do a broader release this summer, Drewery said.
The company also recently raised $5.1 million that includes a previous $800,000 SAFE (simple agreement for future equity) round. The Westly Group led the round and was joined by Valia Ventures, Techstars, Foster Ventures, Foxe Capital, Anthemis and ReFashiond Ventures.
The funding gives Diagon a good runway for the next two years and will enable the company to actively hire, including for a head of product and go-to-market.
“Now we are developing tools that help customers find suppliers better or help them interpret and summarize quotes better,” Drewery said. “We will roll those out as we develop them. We’ve also got some runway to acquire new customers and build more of the product until we raise our Series A, which we haven’t started fundraising for yet.”
It’s easy to assume the e-commerce ship has sailed when you consider we have giant outfits like Shopify, WooCommerce and Wix dominating the sector. But the opportunity for e-commerce platforms that cater to brands remain vast and fertile, since so many smaller businesses continue foraying into the internet in the wake of the pandemic.
Further evidence of this has surfaced in the form of one of the largest fundraises by a startup in Turkey, given that the average Series A usually comes in at below $15 million. E-commerce platform ikas has raised $20 million in a Series A funding round as it seeks to expand its operations into new markets in Europe. The company currently operates in Turkey and Germany, and says its platform simplifies store management for companies that want to have a digital presence.
The investment was led by the International Finance Corporation (IFC) fund, a venture arm of the World Bank Group.
ikas’ co-founder and CEO Mustafa Namoğlu told TechCrunch that the company would be using the new funding for international expansion in Eastern Europe and the DaCH region.
“Most of Europe is predominantly neglected or underserved by those U.S.-based giants,” he said. “The global platforms lack customer service in local languages. It looks easy to start with, for example, a Shopify. But once you start, you need to add other plugins, and you may even need an agency to run it.”
Namoğlu said ikas can win customers against other platforms because it’s more of a “fire and forget” platform. “The first reason our merchants pick us over others is storefront speed, which gives them higher conversion rates. You get this out of the box, even if you pay us €30 per month. The second reason is customer service. Thirdly, we bundle the payments and the shipping labels into our core product, which means you don’t need to go and negotiate with payment providers or shipping labels. You’re immediately ready to go,” he said.
Namoğlu previously founded MUGO, a fashion distribution and retail company, and launched ikas in 2017 with co-founders Tugay Karaçay, Ömercan Çelikler and Umut Ozan Yildirim.
The IFC invests directly in companies as well as through PE and VC funds.
Also investing in ikas is Re-Pie Asset Management, which has grocery delivery startup Getir in its portfolio. The round saw participation from ikas’ existing investor Revo Capital, best known as the first institutional investor in Getir, Param, Midas and Roamless.
UK-based legaltech company Lawhive, which offers an AI-based in-house ‘lawyer’ through a software-as-a-service platform targeted at small law firms, has raised £9.5 million ($11.9M) in a seed round to expand the reach of AI-driven services for ‘main street’ law firms.
To date, most legaltech startups that are deploying AI have concentrated on the big, juicy market of ‘Big Law’ — meaning large, either country-wide or global, law firms that are keenly pushing AI into their workflows. These include Harvey (US-based; raised $106M); Robin AI (UK-based; raised $43.4M); Spellbook (Canada-based; raised $32.4M). But there has been scant attention paid by startups to the thousands of ‘main street’ lawyers, which have far smaller budgets and are harder to monetize.
Lawhive targets its platform at small law firms or solo lawyers running their own shop. Lawyers can use its software to onboard and manage their own clients or be matched with consumers and small businesses through a marketplace feature.
The startup applies a variety of foundational AI models, and it’s own in-house model, to summarise documents and speed up the legal process for both lawyer and client across repetitive administrative tasks such as KYC/AML, client onboarding and document collection. Lawhive says its in-house AI lawyer, “Lawrence”, is built on top of its own large language model (LLM), which it claims has passed the Solicitors Qualifying Examination (SQE) — scoring 81% against a pass mark of 55%.
Speaking to TechCrunch over a call Pierre Proner, CEO and co-founder of Lawhive, said: “Pretty much all of the existing legaltech — AI companies like Harvey or Robin AI, or Spellbook — all go after the corporate market. That’s a very small number of big law firms in the US in the UK. We’re trying to solve the problem in the consumer legal space, which is totally different and a separate market, both in the UK and globally. It’s served at the moment by — in the UK — 10,000 small law firms.”
He said small firms have faced higher costs and a shrinking market: “They’ve got all of these high costs of staffing and paralegals and junior lawyers, trainees, etc, etc. And they only have one to three actual senior lawyers who are earning any money. So the model doesn’t work. There’s this huge exodus of like mid-career lawyers from the main-street/high street model, and a lot of them are going freelance self employed, and that’s where we’ve sort of seen a lot of traction through our platform of self-employed lawyers who use our AI lawyer.”
Although the UK consumer legal market is worth an estimated £25BN, like most legal markets, it’s groaning under the weight of its own costs. This means around 3.6 million people have an unmet legal need involving a dispute each year and around a million small businesses handle their legal issues on their own. So there’s a strong opportunity for automation to help the sector dial up productivity.
Proner added: “We do combine with foundational models from OpenAI and Anthropic, and as well as open source models. But it is our own model, which has been trained on the data that we’ve been able to gather from 1,000s of cases.”
The startup plans to use the seed round to enter other markets, per Proner: “We have our eyes on other markets yet to be publicly disclosed.”
It might be possible to infer where the planned market expansion will focus by looking at Lawhive’s lead investor: The seed round was led by GV, the venture capital investment arm of Alphabet, the US-based parent of Google. Also participating is London’s Episode 1 Ventures, following a £1.5M investment in April 2022.
In a statement, Vidu Shanmugarajah, partner at GV, said: “As a lawyer by training, I have experienced firsthand how needed technology-driven innovation is in the legal sector. Lawhive represents a transformative shift for both lawyers and consumers.”
As U.S. lawmakers weigh a possible TikTok ban, the ByteDance-owned short-form video app released an economic impact report on Thursday. In it, the company touts the platform generated $14.7 billion for small- to mid-size businesses (SMBs) last year, and a further $24.2 billion in total economic activity, supported through small business’s use of TikTok.
In addition, it says that over 7 million U.S. businesses rely on TikTok and that 224,000 jobs were supported by small business activity on the platform in 2023. Of those, 98,000 jobs were supported directly within SMBs on TikTok. The states with the largest impacts included California, Texas, Florida, New York and Illinois.
The study was performed by the economics forecasting group, Oxford Economics. It measured SMB activity on TikTok, along with ad spend and ROI, and leveraged census data and other measurements to come to its conclusions.
While a report of this size and scope couldn’t be thrown together overnight, the timing of its release is likely not coincidental.
In March, a bill that could ban TikTok passed in the House of Representatives. President Biden said he would sign it into law if it also passes in the Senate. Of concern to TikTok, is that the bill gained bipartisan support, passing the House with a 362-65 vote, despite former President Trump’s change of position on the matter. The Trump administration had previously sought to ban TikTok, calling it a national security risk, but Trump now opposes a ban, saying that Meta would benefit.
Meta is clearly preparing for a possible future where TikTok could be banned, if not spun out from ByteDance. On Wednesday, Facebook was updated to support a new video player across its social network; it will recommend Reels, long-form and Live videos, but default to showing them in vertical format, as on TikTok.
YouTube and other short-form video platforms could also gain increased exposure if TikTok were to be banned, and could pave the way for startups competing in the space, as well.
TikTok’s economic report is a clear attempt to make a case for why the app should be allowed to continue to operate, noting that $5.3 billion in tax revenue last year was supported by small business activity on TikTok, including as a marketing and advertising platform.
The company also presented a variety of case studies where business owners claim that TikTok helped to drive sales, website traffic, and other forms of additional revenue.
Tying the ban to the app’s economic impact is a solid PR strategy — especially since a group of TikTok creators got a judge to successfully block Trump’s TikTok ban in 2020 by saying it would affect their professional opportunities, like brand sponsorships, and ability to make an income.
Though TikTok has been urging users via in-app messages to call Congress to protest a ban, the bill still faces a more difficult path to pass in the Senate — and more so now that the Republican party’s leader has reversed his position on the ban.
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