The pandemic exposed many cracks in the supply chain. Shortages of parts, uncertainty of delivery times, proliferation of counterfeit goods and lack of price visibility plagued supply chains across industries. In particular, the world of electronics was challenged as certain components were difficult to procure. Nearly 60% of hardware projects were delayed due to the challenges with access to components. 

In parallel with these supply chain shortages has been the growth of hardware startups. The standardization and cost reduction of components and sensors and cameras, thanks to Apple and Google, combined with advances in computer vision and 3D printing, have led to an explosion of hardware startups. Everything we buy now is “smart,” whether that’s a thermometer, dishwasher or lightbulb. The growth of these companies has led to a dramatic increase in the demand side of the electronic components market without a commensurate unlock on the supply side. 

Enter Cofactr: The One-Stop Solution for Your Electronics Supply Chain

When we first met the Cofactr founders Matt Haber and Phil Gulley during YC W2022, we were blown away by their depth of understanding of the challenges of electronic component procurement. Matt started his career on Broadway in theater production and Phil started in live event production. They then transitioned to building BeSide Digital, an engineering services company that created immersive media events for large brands like Google and Dell, and entertainers like Dave Chappelle. BeSide also helped companies like Zoox build their hardware. The elaborate hardware Matt and Phil built for Broadway, Google and Zoox required complex electronic circuitry and the process of building these circuits exposed them to the challenges of electronic component procurement. Like fellow BCV founder Matthias Wagner who founded Flux after being exposed to the challenges of hardware design while building Burning Man sets, Matt and Phil decided to sell BeSide and start Cofactr to solve the real-world problems they faced as builders. 

Given their personal experience with the pain points in sourcing electronic components, Matt and Phil realized a software-only procurement solution would not suffice. Instead, they decided to build an integrated software and logistics system that combined cloud procurement software with a network of suppliers and a turn-key logistics platform that handled shipping, customs management, counterfeit insurance, inventory, kitting and shipping management. 

Now, with a click of a few buttons on the Cofactr platform, hardware manufacturers can find electronic component inventory, check pricing, order parts, handle replenishment and send parts to the manufacturer’s desired location. Cofactr eliminates dozens of phone calls with suppliers, makes it easier to find parts and helps manufacturers avoid poorly managed on-site warehouses with expensive components. Behind the scenes, Cofactr handles everything including the acquisition of parts, the storage and management of inventory, quality control checks to ensure inventory is not counterfeit and regular shipments of components to board manufacturers. 

We have loved working with Matt and Phil as they have launched and grown Cofactr. They bring an amazing combination of domain expertise, seasoned leadership having successfully built a startup before, scrappiness and overall velocity and urgency. Even at this formative stage, they have achieved early product-market fit with dozens of customers who love the solution and a revenue run rate that has scaled from 0 to nearly $1M in a matter of months.  And they are just getting started!

We at BCV have been fortunate to back many innovative startups in the supply chain space including ShipBob, which has built an integrated software and logistics network for ecommerce brands; FourKites, which provides end-to-end visibility for large shippers; Trucksmarter, which is streamlining the process for over-the-road freight drivers to find loads; Flux which has built the world’s first cloud collaborative platform for circuit design; and now Cofactr,  which is reimaging the electronics supply chain. We are grateful to be in partnership with Matt and Phil as they embark on this journey to become the standard solution for electronics parts procurement around the world.   

Cofactr co-founders Phil Gulley and Matt Haber with Ajay Agarwal