Paperless Parts

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Founders: Jay Jacobs, Jason Ray, Scott Sawyer, Matt Sordillo, and Steve Lynch
Founding: 2017
Mission: Drive innovation forward by making manufacturing more accessible
Employees: 150+ & 80% Local
Workplace: Hybrid
Stage & Capital Raised: Series B & ~$33.5M raised
Investors: OpenView (Series B lead investor)
Key Customers: KAD Models & Prototypes, Re3DTech, Metalmite, Reata Engineering, Athena Manufacturing, Pindel, and more here
Glassdoor Rating: 4.4
Valuation (estimated): $150M – $300M (assuming they sold ~20% of the company in the $30M Series B )
^ this is a useless number. There is no tangible valuation until the business is sold or goes public. Don’t forget it!

Paperless Parts is “estimating and quoting software for manufacturers”. They’re a vertical SaaS platform catering to manufacturers of all shapes and sizes. They help their customers estimate & generate quotes in order to make smarter, faster & more informed decisions to win new customers and increase revenue. Their goal is to transform operations for “job shops” through software that is tailored to the unique demands of the custom part manufacturing industry.

Sounds pretty straightforward. But to understand Paperless Parts you need to better understand American manufacturing. Paperless Parts customers help build race cars for NASCAR & Formula One, insulin pumps for Medtronic, lab equipment for Abbott, spaceships for NASA, and thousands of other custom parts for large original equipment manufacturers (OEMs). Seriously complicated stuff. These manufacturers, or “job shops”, field endless inquiries competing to make custom parts for large builders across a sprawling supply chain of industries, locations, and well…parts. 

Let’s take KAD, a Paperless Parts customer as an example. They build products for Camelbak, Google, Medtronic, Square and Tesla to name just a few. In 2019 they generated 3,140 prototypes on behalf of 35 clients. How do you manage that type of complexity? Historically, manufacturers have patched together physical files, spreadsheets and tribal knowledge to keep all their quotes and pricing history straight. Like every other industry, there is a major need to simplify and host that data in a central place. That’s where Paperless Parts comes in.

Co-Founder Jason Ray was working on a Navy ship and saw up close how complicated it was to buy parts and deal with RFQs (requests for quotes). Co-Founder Jay Jacobs was running the world’s largest prototype sheet metal shop. They came together with a vision to simplify the complexity of manufacturing alongside Scott Sawyer, Matt Sordillo & Steve Lynch. 

American manufacturing has been sort of overlooked by software companies. Maybe it’s the disconnect between atoms and bits. Interestingly, Paperless Parts didn’t even start as a SaaS company. They launched in 2017 with a marketplace, positioning themselves as the KAYAK of manufacturing. But it stumbled out of the gates. Buyers would see a price they saw on the marketplace and then go compare it with the end manufacturer. Those values didn’t always match. Because pricing is a bit more of an art than science and between materials, demand, delivery windows, etc. prices would change. Trust in the marketplace faltered and they just couldn’t quite get it off the ground. Wrestling with this problem, they had to figure out how to dig their way out.

There was something that was working though. 

Manufacturers really liked uploading their parts to the platform and using the pricing engine as a quoting mechanism for their direct customers. Supply side marketplace participants were using the platform to automate PDFs and get quotes out faster to prospective buyers. So Paperless Parts pivoted to a SaaS platform and they were off to the races serving a very important vertical about to be majorly tested.

You all remember the world coming to a screeching halt in March of 2020. Globalization effectively failed us overnight. Global supply chains stopped working and decades of cutting costs “offshoring” manufacturing jobs became a big problem. People were walking around their neighborhoods with bandanas on looking like they were about to rob a bank because we couldn’t get N95s back across the ocean. Ships were stuck at the ports for weeks!

Now, American manufacturing companies are rapidly “re-shoring”. In this Bloomberg article from November, Deloitte reported 25% American manufacturing job growth from 2021 to 2022. 62% of survey respondents said they had started to bring manufacturing jobs back to the U.S. and their data shows that American firms might reduce Asia-originating shipments up to 40% by 2030. That’s a major tailwind fueling some impressive milestones. 

Paperless Parts just announced a move from their office in the West End to a new HQ at 60 State Street to kick off 2023. Over the past year the team has…

A few additional notes about the platform & product capabilities. There are specific workflows for different kinds of manufacturing to help identify commonalities in parts based on “geometry driven” insights. They integrate with ERP systems and other customer data platforms like Salesforce, Hubspot or Mailchimp, and even Quickbooks to streamline data entry and help track customer history.

The product is priced as a classic SaaS platform with a great memory too. With 2D & 3D CAD viewing and geometric search, Paperless Parts lets you view all file formats without having to pay for native CAD software licenses. Geometric search lets you know when you’ve made exact or similar parts in the past, reducing duplicate quoting efforts and increasing consistency across teams of estimators. 

Paperless Parts also helps its customers achieve CMMC compliance. Security is essential in manufacturing and their platform helps clients who bid for defense contracts host data securely in the cloud. Analytics, file sharing, and customized pricing logic for quote forms fill out their suite of capabilities.

Operators to Know:

My investigative powers continue to need work so apologies to the Paperless Parts team I know I missed many up & coming operators internally

Key Roles To Be Hired:

If I were interviewing here are some questions I’d ask:

  • What are the biggest areas of investment over the coming year? Whether it’s team, product, or a host of other factors always helpful to hear how they’re positioning for 2023
  • How have you specifically customized your org chart as a SaaS company to serve manufacturing customers? Org charts are treasure maps and since this is a digital company serving physical customers, would be interesting to learn some ways they’ve intentionally built the company to help their customers
  • What are the missing product features preventing you from closing top prospects? How is the industry shifting, what are the biggest competitive levers to growing?
  • Where is Paperless Parts in 5 years? How do you fulfill the vision of making manufacturing more accessible? For all the core software generalist applicants, this is an ideal opportunity to learn more about the manufacturing customer base and their needs

We’re optimizing for readability here so to learn more about Paperless Parts you’ll have to D.Y.O.R. I’m excited to watch this team bring more manufacturers into the digital age. The re-shoring American industrialists of the 21st century applaud your efforts. See you around State Street!

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