By Eric Peterson | May 02, 2022
Software for manufacturers
Crespo returned to his roots when he launched Valiot in 2018. "I've always been around manufacturing," he says. "My grandfather owned a paint factory and I worked there almost every summer in my childhood."
It follows that Valiot is a response to two main issues with manufacturing. "First of all, if you step into any manufacturing facility, you get the feeling you're in the '60s," he says. "The second part of this is that 1 percent of optimization in a manufacturing process represents massive amounts of volume."
Valiot has two primary products: FactoryOS and ValueChainOS. FactoryOS collects data from a variety of internal inputs, such as IoT cameras and sensors, to "It normalizes and centralizes the data . . . to start providing the operation and management with at least some visibility of what is actually happening," says Crespo.
Using a subset of artificial intelligence (AI) algorithms, FactoryOS then runs simulations to identify and define the most optimal way to run the machines, define control set points and reduce human decision points.
Crespo highlights a "a multibillion-dollar company" that's now a FactoryOS user. On a site visit, Crespo found employees would adjust a ceramic furnace by hand based on a rough estimate of the temperature outside.
"Just like that decision point, that company has 20 to 30 different decision points under their control per line," he says. "That represents massive amounts of value in utility consumption, first of all." Secondly, the rejection rate was an issue with the legacy processes, and Valiot "almost took it down to zero."
ValueChainOS offers the same connectivity with a company's external supply chain. "There is very little connectivity through the whole value chain," says Crespo. "Instead of aiming just at the job floor, we aim at value-chain planning, things like replenishment procedures and production scheduling."
Like FactoryOS, ValueChainOS does more than aggregate and present data. "It runs several optimization models," says Crespo. "If something changes, how that has an effect on the whole value chain and it automatically reacts to that."
That's key to the utility of Valiot's platforms. "We provide actionable items for the operation," says Crespo. "We're not translating the operation into a dashboard. . . . Data by itself does not generate value. The operation must do something with that intel."
Customers include multinational companies like Heineken, John Deere, and Lamosa. Crespo says the company's target market is mid-sized and large manufacturers in most any sector.
MIT published a study on Valiot's work with Heineken's largest brewery in 2021. "We increased by 5 percent their production capabilities without any investment in machines, just by optimizing the way they operate," says Crespo.
Valiot has offices in Austin (its headquarters), Detroit, and Dallas as well as Monterrey. "Most of the development team is in Mexico," says Crespo. "The U.S. is mostly business development and finance."
After launching its products as software as a service (SaaS) in 2020, the company saw sales jump from $100,000 a year to $1.5 million in 2021. Crespo forecasts more than 300 percent growth to a target of $5 million for 2022, pointing to a road map with Valiot's existing customer base. "We already provide them with evidence of the value we can deliver, so now they are asking us to do a full rollout at their facilities," he explains. "That's where the scale really gets interesting."
Challenges: "Talent is always a challenge," says Crespo. "It's a hard market."
Market awareness is another hurdle for Valiot: "Our customers see us as competition to SAP or Siemens or Oracle, which are obviously huge companies with slower technologies and slower processes. We have to take advantage of opportunities to grow, but it's only a matter of time before the market is no longer a big blue ocean, but a red ocean."
Opportunities: Crespo sees potential in oil and gas as well as other markets. "Our technology by itself is definitely agnostic, but we have stumbled upon some verticals that are interesting," he says. "A vertical that almost no one is looking at is the fuel service center, which is the middle step between fuel manufacturers and automotive and some other industries. There are a lot of them -- thousands of companies -- and a lot of value is being generated doing that, so there's a lot of opportunity."
While international markets are on Valiot's radar, Crespo says the focus is squarely on the U.S. "Just to put a couple of numbers out there, Texas has more manufacturing GDP than all of Latin America," he notes.
Needs: Valiot raised a seed round led by Motivate Venture Capital of Chicago, but Crespo sees a need for more capital, namely a potential Series A round of about $20 million. "We might be raising a Series A in the summer . . . to be able to go for bigger companies or larger markets," he says.