SUMMARY
- Mstack raises $40 million in Series A funding to expand R&D and global operations
- The startup focuses on custom manufacturing and supplies speciality chemicals to over 50 US-based enterprises.
- Plans to enter the agrochemicals and pharmaceuticals sectors.
Mstack, a cross-border speciality chemical manufacturing startup, has secured $40 million (around INR 335 crore) in a Series A funding round. The round was co-led by Lightspeed and Alphawave, with HSBC Innovation Banking providing debt financing. The capital injection will enable Mstack to scale its R&D capabilities in India and the Middle East, along with expanding operations in key markets, including North America, Latin America, and Asia.
Founded in 2022 by Shreyans Chopra, Mstack provides a custom manufacturing platform focused on speciality chemicals, allowing mid-to-large enterprises to source, test, and track chemicals through a streamlined supply chain. Mstack distinguishes itself by building its own brand of speciality chemicals instead of acting as a marketplace. It leverages existing capacities in emerging markets like India, Saudi Arabia, Korea, Thailand, and Vietnam to fulfill orders.
With the fresh capital, Mstack aims to penetrate the agrochemicals and pharmaceuticals sectors, expanding beyond its current focus on oil and gas, water treatment, coatings, and home and personal care. The company is also set to enhance its in-house R&D lab, which generates 20% of its revenue from customised chemicals and intellectual property-driven products.
Mstack has experienced rapid growth, reportedly expanding 15X over the last 12 months while achieving profitability in the June quarter of FY25. Although the company’s revenue figures have not been disclosed, the growth has positioned Mstack as a key player in the speciality chemicals market, particularly as global supply chains face geopolitical risks.
One of Mstack’s unique advantages lies in its ability to organise fragmented and unstructured supply chains, particularly in low-cost production countries. The company sources chemicals from family-owned manufacturers in emerging markets, helping them navigate challenges related to cross-border logistics and quality management. Mstack currently supplies speciality chemicals to over 50 enterprises in the US.
The investment comes amid rising demand for speciality chemicals, which are crucial in various industries. According to Bejul Somaia, partner at Lightspeed, “Geopolitical dynamics pose risks for supply chain disruptions in the global speciality chemicals market. With demand for these chemicals growing rapidly, there is a need to increase R&D investments and unlock new pockets of supply.”
Mstack competes with firms like Scimplify and Distil. While Scimplify raised $9.5 million in August 2023, Distil secured $3.1 million in June 2023. The global speciality chemicals market, valued at $800 billion in 2023, is projected to reach $1.04 trillion by 2029, offering substantial growth opportunities for innovative companies like Mstack.
