AG5 throws a lifeline to a manufacturing industry drowning in spreadsheets

by Ana Lopez

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

“Manufacturing workers are the largest group of employees,” said Rick van Echtelt, CEO of AG5 in an interview with businessupdates.org. He claims there are 2.7 billion worldwide. “On a macro level, the current pace of technological development, rising revenues and aging populations means that the shortage of skilled labor is getting worse every year, making the balance of our economies more precarious. I like the idea that we can make a difference within this great challenge.”

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

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

At a previous start-up, AG5’s founders worked on the same problem through a different lens, building tools for emergency responders, including firefighters.

“Fire fighting requires highly specialized training. Just as operating different fire engines requires very different skills, the same thing happens on a factory floor. Each machine and task requires specific know-how. I was shocked when I realized how manual and inefficient the whole process was,” says van Echtelt. “On a much larger scale, organizations struggle to keep track of which frontline workers are qualified to operate a particular tool or work on a particular production line. They use large HR systems, but this software is not built for competency management. So every company builds its own spreadsheets. It is cumbersome, scalable and error-prone. We help organizations get rid of this and provide them with a turnkey competency management solution that integrates with the software they already use.”

Macroeconomics may be on its side, because upskilling is the name of the game.

“The European Commission has declared 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 problem is such a threat to our way of life that the Commission has earmarked €85 billion for investment in developing digital skills in the workplace because it is such a serious problem that it receives disproportionately little attention. This is a particularly sensitive issue in Germany, where 19% of the country’s GDP comes from manufacturing.”

The company aims to establish itself over time as a skills management system for its employees, ensuring that the teams are trained and deployed efficiently.

“Ultimately, we want to lead to happier and healthier employees, whether they work at a fixed desk with a computer or on the shop floor with heavy machinery,” explains van Echtelt. “This led to more 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.

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