What they do: Asseta is a marketplace for companies to buy semiconductor parts from suppliers around the world. Asseta connects buyers to manufacturers--handling payment, shipment, and fulfillment while taking drastically lower commissions than their competitors. Why it's a big deal: The way we buy and sell capital is inefficient and antiquated, allowing middlemen to make millions, while keeping manufacturers in the dark. Asseta disrupts this $100-billion market, and delivers transparency, efficiency, and serious savings. The Asseta Marketplace connects manufacturers with the parts and equipment they need, and allows them to buy and sell directly without paying harsh mark-ups. With this kind of impact, it's no wonder the company has been profitable since it's debut and is the only used manufacturing equipment company to attract the attention of Y Combinator. Asseta will change the landscape of manufacturer-vendor relations for years to come.
Garrett Beck CSO @ Asseta
Last Funded January 2014!
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Garret founded Applied and Integrated Capital Group and was an inside sales associate at Trulia. He studied Legal Studies at University of California.
Anton Brevde, Jonathan Pease, and Garrett Beck were recent grads with great paying jobs, but they had a problem.
They hated their high-paying jobs.
None of them had studied engineering, but there they were, working as brokers for a company that bought and sold manufacturing equipment. Brevde says the whole things was “a joke.”
“I had no business putting these transactions together, making the amount of money I was making,” he says. “It really made no sense.”
There are literally thousands of brokers just like them across the country, who wheel and deal capital equipment over the phone.
Brevde, Pease, and Beck couldn’t believe how chemical engineers had no choice but to depend on young, inexperienced brokers like them — brokers who didn’t understand how the equipment worked, or how it would be used — when they needed to buy parts or machinery.
The three of them were on their way to work one day when they decided to do something about it. They quit their jobs, and vowed to make things better.
Google alum Danial Afzal joined their crusade shortly thereafter and, since launching in June, the Y-Combinator-backed company has experienced 250% month-over-month growth. The site is free to use, and makes revenue through a relatively affordable 5-10% commission on all sales. This simple model brought in more than $131,000 in August, while the annual earning potential is worth $5-billion.
How Asseta Works
Asseta is like eBay or Amazon, but instead of consumer goods, it focuses on capital equipment — the machinery used for front and back end processes, wafering, facilities, assembly, test, lab, electronic, and mechanical work.
The site connects companies in need of parts or equipment with other companies that have what they’re looking for. The whole process is easy and transparent, since no middlemen are involved. Sellers just name their price, or invite buyers to make them an offer — Asseta leaves the price-setting up to them, but collects a pre-determined commission (5-10%) for facilitating the sale. And because Asseta knows how the corporate world works, they can help with purchase orders, contracts, and oft-necessary approval chains.
Still, there’s more to the site than just buying and selling: It helps companies manage their entire inventory of equipment, too — even if they don’t want to sell it.
“Our online dashboard has a way of keeping track of what they have,” Brevde says, noting many corporations have a hard time keeping their capital equipment collection in check.
“They’re really disorganized about their equipment, especially their warehouse equipment,” he says. “Old equipment gets put in a warehouse, and everyone basically forgets about it.”
The Asseta dashboard helps managers keep track of what they have, and remember where they have it. And if they don’t need something anymore, they can list it in the Asseta Marketplace with a few simple clicks.
Meanwhile, the site discreetly keeps track of who has what, so if a spare part becomes available, Asseta automatically alerts the companies that might need it without them ever having to ask.
Lost and Found
As a broker, Brevde saw companies buy things they already had because they either forgot they had it, or didn’t know where it was. This might not be such a big deal if the equipment in question was a dusty inkjet printer worth $50, but in the world of manufacturing, a company’s cache of forgotten-about equipment can be worth tens (or hundreds) of thousands of dollars.
Brevde even saw brokers buy equipment from one branch of a company, then turn around and sell it for a higher price to another branch of that same company.
“Companies will buy things from another one of their own locations through a broker, and they won’t find out until it gets there and it has their sticker on it,” he says in disbelief. “
Companies can protect their bottom line in a big way by buying secondhand capital equipment.
“We sell things for, generally, 10-20% of the original price,” Brevde says. “An optical coater that Oakley bought in 2001 for $224,000 sold on the Asseta website for $40,000.”
By eliminating middlemen and brokers, many manufacturers are able to acquire the equipment they need for much, much less.
“I think what’s really exciting about what we’re doing, besides saving these big companies money, is really having a much bigger impact on smaller companies that are just getting started,” Brevde says. “For them, capital equipment is kind of their biggest fear.”
He hopes Asseta’s open-air marketplace will encourage entrepreneurs and innovation.
“We want to lower the barriers of entry,” he says. “It could have a really transformative effect.”
How big is the market?
At least $100 Billion is spent on used manufacturing equipment each year through offline channels.
How do you make money?
We charge buyers a 5%-10% transaction fee after a successful transaction. To provide a comparison, brokers charge ~25%.
Why did you pick this idea to work on?
We met while working for one of the largest brokers in the industry. We were blown away by how inefficiently the industry operated, relying on salespeople cold calling 14 hours a day.
What's your biggest risk? What keeps you up at night?
Not scaling quickly enough. This is a massive opportunity in a winner-take-all market. While we don't have any direct competitors now, we know it's only a matter of time.
Why is your team awesome? Why you?
We have the combination of domain expertise and tech experience necessary to build this marketplace. As a group, we sold $15 Million worth of equipment our first year out of college. We understand the equipment, the enterprise customers and their internal processes.
How do you acquire customers?
We acquire buyers via organic SEO and we've developed two creative methods to collect the supply. Please contact us to learn more.
What's new about what you're making? How is it different?
Essentially, we are leveraging technology instead of salespeople, which allows our company to scale with much higher margins, bring clarity to a fragmented market, and provide a simple platform that our clients enjoy using.
What do you understand about your business that others just don't get?
eBay Business and Industrial and other equipment marketplaces have failed because they assumed that sellers would post equipment on their own. This consumer-centric approach does not work.
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