Keychain raises $18M to play matchmaker for CPG manufacturers and brands

Keychain, a New York City-based B2B marketplace that plays matchmaker between third-party CPG manufacturers and retailers and brands, raised an $18 million seed round.

Why it matters: According to Keychain, $500 billion worth of packaged products are produced every year by more than 20,000 manufacturers in the U.S. alone.

Details: The raise was led by Lightspeed Venture Partners, and includes Box Group, Afore Capital, SV Angel, and over 20 CPG industry professionals.

• The round values the supply chain company at $75 million, a source familiar tells Axios.
• Proceeds are being invested in research and people as Keychain builds the product's architecture from the ground up, CEO Oisin Hanrahan tells Axios.

How it works: Keychain's platform aims to help customers navigate the manufacturing process, from providing competitive intelligence and manufacturer sourcing to terms negotiation, onboarding, and compliance.

• More than 10,000 manufacturers have joined the network thus far, with Keychain's AI-powered technology helping brands locate production and packaging partners in minutes.

The big picture: Keychain hopes to solve a fragmented process, serviced by trade shows and brokers and involving multiple visits to manufacturers, resulting in time-consuming efforts to lock down the right partners.

Of note: While the company plans to open its platform to select retailers and brands in 2024, Keychain is currently available only to invited partners.

• It's an enterprise-level tool that will be initially utilized by the largest brands and retailers due to its expense, Hanrahan says, though eventually, it could have a product for smaller companies and startups.

The intrigue: As Keychain builds out its offering in the months to come, the company will weigh a potential entry into inventory financing.

• That could include raising significant capital and providing the financing itself or bringing in a third party, among other options, Hanrahan says.

Catch up fast: The months-old tech startup was founded by Hanrahan, Umang Dua and Jordan Weitz.

• Hanrahan and Dua founded Handy, which they sold to Angi (formerly Angie's List) for nine figures, and became CEO and CRO, respectively, of their acquirer.
• Weitz, who was previously an investor at Monogram Capital Partners, brings CPG, PE and VC experience to the company.

What they're saying: "It's the same problem we've worked on solving in other categories. We understand how to make these marketplaces work," Hanrahan says.