Business

Brazilian Y Combinator-backed Tractian raises $3.2 million for predictive maintenance hardware

The hardware startup backed by Y Combinator now has DGF in its investor team and wants to expand its hardware to Latin America

Tractian's co-founders Igor Marinelli (CEO) and Gabriel Lameirinhas (COO). Photo: Tractian/Courtesy
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  • Tractian makes hardware with predictive maintenance sensors for machines in the industry;
  • The company wants to expand the team from 30 to 100 people and start internationalization.

Brazil-based predictive maintenance hardware startup Tractian announced that it has raised a $3.2 million Seed round led by Brazil‘s fund DGF with participation from the Citrino family office, and Claudia Massei, CEO of Siemens in Oman.

Tractian’s co-founders Igor Marinelli (CEO) and Gabriel Lameirinhas (COO) studied computer engineering together. Marinelli finished his degree at the University of Berkeley, in California, where he spent a year. There he had contact with hardware startups for industry, a sector with which he is very familiar: his father is a maintenance coordinator in a paper company in Chile. Lameirinhas’ father was also in the industry, a coordinator at InterCement, a cement firm. “At several barbecues, we built the idea of working in the industry if we didn’t found a startup together,” says Marinelli, in an interview with LABS.

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The two friends started their entrepreneurial life with a crowdfunding startup for donations in 2015, which failed. Then they founded a startup for chronic disease prediction, Blue AI, which exists to this day, although Marinelli and Lameirinhas left the company.

Marinelli was then hired as a software engineer for the maintenance teams of the industrial paper giant Klabin. It was there that he developed a “chronic disease predictions for machines” solution for Klabin, which would give rise to Tractian. Klabin was the startup‘s first customer, in September 2019, that is before Tractian was even officially created, which occurred in January last year.

Marinelli and Lameirinhas founded Tractian with a BRL 100,000 of their own capital: they sold their cars (a Honda Fiat and a Ford Fiesta) and added BRL 40,000 from their savings to get the company started.

Breaking contract with the first client to seek independence

“Most startups that start in the industrial sector believe in the tale of ‘we will pay you to build your product’. And they are held ‘hostage’ by that company. In fact, you are not building a product for the market, you are solving an internal problem of that company.”

This insight led Marinelli to break the contract with Klabin. “We had to bleed a lot in the beginning. We had a team of five people, we had to put in more capital out of our own wallet.”

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In April 2020, the company almost ran out of money. But the product Tractian had developed (a hardware with predictive maintenance sensors for machines in the industry) was mature and being tested, which caught the attention of executives from Volkswagen and Stone, who eventually became the startup‘s first investors.

“After they came on board, we started to drive, to generate customer revenue. Until, in January of this year, we got our first Seed from Y Combinator along with other funds like Norte Ventures from Brazil.”

Today, the startup monitors machines in small and medium-sized companies up to large industries, such as AbInBev, Embraer, Yara, and Electrolux.

A Brazilian style hardware startup

Tractian’s hardware is not an end product like an iPhone. It is a channel that allows the startup to acquire customers quickly without having to integrate with all the servers in the industry, which, according to Marinelli, would take years.

Through the hardware’s sensors, the startup gets key predictive maintenance data from industry equipment on its platform. “If Brazilian industries had sensors we could integrate [our system] with those sensors. But it doesn’t make sense for companies to buy BRL 50,000 sensors,” he says.

Tractian presents itself as the starter pack of predictive maintenance for the industry. Companies contract the service for BRL 9,000 per month, receive the sensors in a box and place them in the equipment. The companies have access to Tractian’s platform and can visualize when the machines are going to break down, for example.

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“When the sensor arrives in the industry it’s like we are a SaaS company. We do video conferences [to assist with usage]. But before the sensor gets to the industry, it’s like we’re Apple. We have our research labs, we have R&D to accelerate the development of the hardware. The machine model needs a lot of resources or a lot of time. Yet, we don’t have a lot of time.”

With the Seed round, Marinelli intends to expand the number of employees from 30 to 100 people, hiring for the commercial team. For hardware development, the work is face-to-face at Tractian’s office in Vila Mariana, in São Paulo, but the job openings for software engineers are remote eligible.

“Our idea is to go from 45 industries that currently use our service to 600 and internationalize. We already have tests running in other countries with our sensor, such as Algeria, the United States, Argentina, and Singapore.”

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