You would think that an industry like manufacturing has its own software stack, but in many cases, a huge amount of stuff is handled through Excel spreadsheets. The thing is, spreadsheets are great for a lot of things, but for manufacturing, and especially on the people management front, there’s simply To be a better way, AG5 believed. A handful of investors agreed, adding €6m to the Dutch startup’s coffers as it begins to ramp up.
“Frontline manufacturing workers are the largest group of workers,” AG5 CEO Rick van Echtelt says in an interview with TechCrunch. He claims there are 2.7 billion in the world. “At the macro level, the current pace of technological development, increasing turnover and an aging population mean that the shortage of skilled workers is getting worse every year, making the balance of our economies more precarious. J like the idea that we can make a difference in this great challenge.
The company was started during the first years of its life, building an early product/market to prove its idea before selling it to institutional investors. Headline came out on top, with Acadian Ventures and a handful of other investors rounding out the round. The company aims to continue its internationalization beyond the Netherlands, starting with Germany, and to expand its integration ecosystem so that more customers can use their existing tools to integrate with their HR tools and of learning.
The company raised $6 million at a “significant” valuation, although the company declined to name the exact terms of the deal.
In a previous startup, the founders of AG5 were working on the same problem from a different angle, creating tools for emergency responders, including firefighters.
“Firefighting requires highly specialized training. In the same way that operating different firefighting vehicles requires vastly different skills, the same is true in a factory. Each machine and each task requires 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 are struggling to maintain an overview of frontline workers qualified to operate a certain tool or work in a certain production line. They use large HR systems, but this software is not made for talent management. Thus, each company builds its own spreadsheets. It’s cumbersome, it doesn’t scale, and it’s error-prone. We help organizations get rid of it and offer them a turnkey skills management solution that integrates with the software they already use.
Macroeconomics can be on his side, because sophistication is the name of the game.
“The European Commission has declared 2023 the European Year of Skills. Twenty-eight professions ranging from construction and healthcare to engineering and IT experienced shortages, showing a growing demand for high and low-skilled workers,” says van Echtelt. “The problem is such a threat to our way of life that the Commission has earmarked an investment of €85 billion in the development of digital skills in the workplace because it is such a serious problem that receives disproportionately low attention. This is a problem particularly felt in Germany, where 19% of the country’s GDP comes from the manufacturing industry.
Ultimately, the company wants to establish itself as a system for managing the skills of its employees, to ensure the training and effective deployment of teams.
“Ultimately, we want to lead to happier, healthier workers, whether they’re working at a stationary desk with a computer or in the factory with heavy machinery,” says van Echtelt. “This has led to greater personal empowerment, more job opportunities, and a reduction in 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.