AG5 throws a lifeline to a manufacturing industry drowning in spreadsheets

You’d think that an industry like manufacturing had its own software stack, but in a lot of cases, a huge amount of getting-things-made is managed through Excel spreadsheets. The thing is, spreadsheets are great for many things, but for manufacturing, and especially on the people-management front, there simply has to be a better way, AG5 believed. A handful of investors agreed, adding €6 million to the Dutch startup’s coffers, as it starts ramping up.

“Manufacturing front-line workers are the biggest group of workers,” says Rick van Echtelt, CEO of AG5 in an interview with TechCrunch. He claims there are 2.7 billion of them, worldwide. “On a macro-level, the current pace of tech development, increasing turnovers and population aging means that the shortage of qualified workers worsens every year, making the balance our economies lay in to more precarious. I love the idea that we can make a difference within this big challenge.”

The company was bootstrapped for the first few years of its life, building out early product/market fit to prove its idea before shopping it out to institutional investors. Headline came in as the lead, along with Acadian Ventures and a handful of other investors rounding out the round. The company aims to continue internationalizing beyond The Netherlands, starting with Germany, and broaden its integration ecosystem so more customers can use their existing tools to integrate with their HR and learning tools.

The company raised $6 million at a “sizable” valuation, although the company declined to name the exact terms of the deal.

In a previous startup, AG5’s founders were working on the same problem through a different lens, building tools for emergency responders, including firefighters.

“Firefighting requires highly specialized training. In the same way that the operation of different firefighting vehicles requires very different skills, the same happens on a factory floor. Each machine and task require specific know-how. I was shocked to realize how manual and inefficient the whole process was,” says van Echtelt. “On a much larger scale, organizations struggle to maintain an overview of which frontline workers are qualified to operate a certain tool or work in a certain production line. They use large HR systems, but this software is not built for skills management. So each company builds its own spreadsheets. It’s cumbersome, it doesn’t scale and it’s prone to error. We help organizations get rid of these and offer them a turnkey skill management solution that integrates with the software they use already.”

Macro economics may be on its side, as upskilling is the name of the game.

“The European Commission has made 2023 the European Year of Skills. Twenty-eight occupations ranging from construction and healthcare to engineering and IT had shortages, showing a growing demand for both high and low-skilled workers,” says van Echtelt. “The issue is such a threat to our way of life that the Commission has set aside €85 billion investment in the development of digital skills in the workplace since it’s such a severe issue that receives a disproportionally low amount of attention. This is a particularly felt issue in Germany, where 19% of the Country’s GDP comes from manufacturing.”

Over time, the company wants to establish itself as a skills management system for its workers, to ensure the teams are trained and deployed efficiently.

“Ultimately we want to lead to happier and healthier workers, regardless of whether they work at a fixed desk with a computer, or on the factory floor with heavy machinery,” explains van Echtelt. “This lead to more personal empowerment, more job opportunities, and reduce work-related injuries and illnesses.”

The company currently has 31 employees, and an impressive lineup of early customers, including Douwe Egberts coffee and beverages, KLM Air France, TataSteel and Toyota Boshoku.