According to the Consumer Brand Association, the CPG industry is in excess of $2T per year and is the largest manufacturing employer in the United States, supporting over 20M jobs. With a such a large total market, brands and retailers are constantly looking to expand their manufacturing footprint to bring new products to life. However, when searching for new manufacturers the process begins with a basic and tedious Google search or by visiting tradeshows with the hopes of finding the right partner. Keychain is a marketplace and management platform for brands and retailers to link up with key, vetted manufacturers in the CPG space. Founded by the team behind Handy (acquired by Angi), the marketplace connecting homeowners with home improvement professionals, Keychain plans to launch next year with a focus on saving brands and retailers time, cost, and effort when sourcing their products, reducing the risk of working with new partners. Initially focusing on the food and beverage segment and large brands and retailers, the company plans to expand the offer to benefit smaller retailers and other parts of the CPG ecosystem as well. Keychain also plans to expand its offering to be an end-to-end platform that provides competitive intelligence, sourcing, negotiation, onboarding, and compliance.
AlleyWatch caught up with Keychain Cofounder and CEO Oisin Hanrahan to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
We raised $18M in a seed funding round led by Lightspeed Venture Partners, with participation from BoxGroup, Afore Capital, SV Angel, and over 20 CPG industry professionals.
Tell us about the product or service that Keychain offers.
We’re excited to announce more when we launch our product in Q1, but we’re developing a manufacturing platform for the packaged goods industry. If you ask any CPG brand, ‘What is the hardest part about running your business?’ they’ll tell you that it’s finding the right manufacturing partners–the companies who can help them actually produce and package the products we find on store shelves. Today, this massive industry operates completely offline and it’s dominated by time-intensive vetting at trade shows and via brokers. At Keychain, our platform has a marketplace at its core, matching thousands of manufacturers on one side with brands and retailers on the other side.
What inspired the start of Keychain?
My cofounder Umang and I spent a decade building and running a platform for home services, and working closely with retailers. And we saw how powerful marketplace dynamics can be for fragmented industries. After a lot of research, meeting Jordan, and talking to some of the companies that we worked with at Angi, we realized that there was this need for a true platform, a true marketplace that connects brands, retailers, and manufacturers.
How is Keychain different?
By building the world’s first comprehensive platform for the CPG supply chain, Keychain is bringing clarity and convenience to the industry for the first time.
What market does Keychain target and how big is it?
Keychain targets stakeholders in the CPG supply chain, which means brands, retailers, and manufacturers. Every year in the U.S. alone, $500 billion worth of packaged products are produced by more than 20,000 manufacturers, and many more different branded products are sold on store shelves of major grocery stores, supermarket chains, and retailers. This does not even account for the number of stakeholders at a global level.
What’s your business model?
Depending on the exact workflow manufacturers, retailers and brands, will pay to use the product. Right now, we’re starting with food and beverage and larger retailers and brands. In the future Keychain will be beneficial for smaller brands or retailers.
How are you preparing for a potential economic slowdown?
It’s complicated to solve the issues in the CPG supply chain. There are lots of players and processes that are used to produce packaged goods, and they vary from product to product. We feel confident in the platform we’ve created and know that it will fill gaps in this market, even in an economic slowdown.
What was the funding process like?
We feel really fortunate at Keychain since we know that it can be a challenging fundraising environment for a lot of great founders and companies. As founders with a previous exit, who are tackling a massive category with a business model that aligns well with what we’d done in the past, Umang and I were lucky to have a lot of interest from investors.
What factors about your business led your investors to write the check?
A few key factors aided this funding round, including the market opportunity, business model, and team. Keychain is founded and led by a team of experienced operators. Umang and I sold Handy to Angi before becoming, respectively, CEO and CRO of the newly combined public company. We’re also joined by cofounder Jordan Weitz, who brings experience in the CPG sector from his time in private equity and venture capital.
What are the milestones you plan to achieve in the next six months?
We have a clear vision for the first product we’re going to launch in Q1 of 2024. For the next few months, we’re laser-focused on working with our first few partners and manufacturers to bring this product to life.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
You must be resolute in your commitment to do whatever is needed at the time in order to face this challenge head-on. We’ve experienced this at Handy and had to make the tough decision to slow growth. After spending a ton of time discussing the strategy and paths forward, once we made a decision, we didn’t second guess ourselves and charged forward. We were successful in this, and were able to get the business to be sustainable and bring it toward profitability in 2016.
You must be resolute in your commitment to do whatever is needed at the time in order to face this challenge head-on. We’ve experienced this at Handy and had to make the tough decision to slow growth. After spending a ton of time discussing the strategy and paths forward, once we made a decision, we didn’t second guess ourselves and charged forward. We were successful in this, and were able to get the business to be sustainable and bring it toward profitability in 2016.
Where do you see the company going now over the near term?
Moving forward, Keychain aims to help its partners navigate the entire manufacturing process, all the way from competitive intelligence and manufacturer sourcing, to terms negotiation, onboarding, and compliance.
What’s your favorite fall destination in and around the city?
I’ve got a 4-year-old girl and a 2-year-old boy – any playground is my friend. Battery Park playscape, Rockefeller Park playground, Pier 25 playground. All the slides, all the time.
