Electronics manufacturing company MacroFab announced $15M in Series B funding last week, doubling its total venture funds. It’s a fitting factor for a company that’s doubling its revenue year over year, according to CEO Misha Govshteyn.

But let’s back up. What is MacroFab, anyways?

“We are a manufacturing-as-a-service company,” Govshteyn explained to engineering.com. “We offer a software platform that aggregates a lot of factory capacity, and we make it available to our customers through a digital interface.”

We spoke with Govshteyn to learn more about MacroFab and electronics manufacturing-as-a-service.

Electronics Manufacturing-as-a-Service

So you’ve designed a printed circuit board, and now it’s time to make it real. To get that PCB manufactured, you could source all the components, find suppliers and partners, deal with the inevitable design changes and logistics issues, and, if all goes well, test your final board and hope it works.

Or, you could let someone else handle it all for you. Someone like MacroFab.

“We’re fully turnkey,” said Govshteyn. “We essentially become the contract manufacturer. We source the components. We drop ship those components into a factory that’s chosen by our software algorithms. The factory builds the product to ship it back to us. We do final quality inspection, and then deliver it on to a customer.”

MacroFab has a network of 75 factories across Canada, the U.S., and Mexico, with more being added all the time. These are independent factories—MacroFab does not own nor intend to own its production facilities (other than one quality control line in Houston, where the company is headquartered). Instead, MacroFab taps into its partner factories’ unused capacity, and there’s a lot to tap. The average electronics factory is only 60 percent utilized, according to research from IPC and New Venture Research. That other 40 percent is up for grabs.

But customers don’t have to worry about which of MacroFab’s 75 factories is building their product. Govshteyn draws a comparison to cloud behemoth AWS: “When you use Amazon Web Services, you no longer know what physical infrastructure you’re on, nor do you care. You trust that Amazon will place you in just the right rack, just the right server. And that’s essentially what we’re doing.”

PCB Assembly in the Cloud

Govshteyn and the rest of the leadership team at MacroFab have had their heads in the cloud for a while. They previously founded a cloud cybersecurity company called Alert Logic, which got its humble start in 2002 in Govshteyn’s Houston house and now has offices on three continents. Govshteyn served as Chief Security Officer for 17 years before leaving Alert Logic, and he soon stepped up to CEO at MacroFab after having been an investor for three years.

Govshteyn’s comparison of MacroFab to AWS is just one of many neat analogies. Companies like Uber, Airbnb, and a flood of other digital disrupters also spring readily to mind.

“There have been a lot of industries that got upended by the internet, and that hasn’t happened yet in this industry,” Govshteyn reflected. “It’s been blowing my mind because it’s such a large industry that has been untouched by the digitization wave that we’ve seen happen.”

(MacroFab isn’t the only company that’s noticed this opportunity—read our recent article on San Francisco–based  Tempo Automation for more: Push-Button Manufacturing Comes to Printed Circuit Boards).

Just as you can order a meal straight to your door and avoid interacting with a waiter, chef, or even delivery driver, so too can you order an assembled PCB without having to dust off your dwindling social skills.

“Engineers have a mission in life of never speaking to somebody in person,” Govshteyn joked. “So that’s actually how [MacroFab] was born originally—it was a couple of engineers that got sick of dealing with salespeople.”

The alternative is MacroFab’s self-service online platform, where users upload their design data including PCB layer files, component placement files, and bill of materials (BOMs). MacroFab supports native design files from EDA tools including Eagle, KiCad, Diptrace, Altium, PADS, OrCAD, and Allegro, as well as Gerber files for PCBs and Excel spreadsheets for BOMs.

Once all the data is entered, MacroFab’s algorithms kick in, running automated design for manufacturability (DFM) checks, quoting prices, and determining which of MacroFab’s 75 factories is best suited for the job.

“Our platform is smart enough to know what kind of factories our partners run,” Govshteyn explained. “We know what kind of pick-and-place machines they have, what panel sizes they can support, we know what kind of secondary processes they’re good at handling. Some factories can do conformal coating, some factories can’t. So our algorithms know that.”

For smaller jobs, the entire process from upload to placing an order often takes less than an hour. Users can then track their order online, just like tracking the pizza they ordered to celebrate another day of successfully avoiding human interaction.   

“We have customers that literally go to production using that model. They know exactly what they need from us. And their designs stay in our platform, and they just do reorders directly from our digital interface,” Govshteyn said.

MacroFab’s self-service customers come from across industries and comprise many computing, robotics, IoT, and even social media companies, according to Govshteyn, including “some of the biggest names in tech out there.”

End-to-End Supply Chain Management

Though algorithms are doing the heavy lifting, there are also humans on MacroFab’s engineering team that help identify problems before production. “Our history has always been to write a ton of software to automate every step, but ultimately humans in the loop is the right solution,” Govshteyn asserted.

This is especially true for complex orders that go beyond PCBA. Though the majority of MacroFab’s orders are low-volume self-service projects from engineers, the company also offers full product assembly. These projects are usually ordered through MacroFab’s sales team rather than the online platform, though customers can still use the platform to monitor the process.

“We will order all the materials that our customers need to build out product,” Govshteyn said. “That means all the PCBs, all the electrical components, all the mechanical components, all the consumables. If they need to be custom, they can be either 3D printed or injection molded.”

MacroFab sends its factories production kits that include everything needed to build and test the product, and MacroFab itself performs secondary quality control checks. In some cases, MacroFab will inventory the final product and ship it to end users on behalf of their customers.

“It’s end-to-end supply chain management. In some cases, we have multimillion-dollar contracts where we will take over the entire builds. Revenue-wise, that’s most of our business. Some of these are coming from other manufacturers in the U.S., but the larger ones tend to come from Asia,” Govshteyn revealed.

Are Supply Chain Troubles Getting Worse?

Like many others, MacroFab has been dealing with supply chain instability since the onset of the COVID-19 pandemic in early 2020. The instability persists to this day, and the worst may be yet to come.

“We’re very close with a couple of supply chain executives at TTI and DigiKey, and they’re telling us that it’s the worst they’ve seen in 30 years,” Govshteyn said. “We are not in the ‘it’s about to get better’ phase. We’re in the, ‘it’s still getting worse’ phase.”

Govshteyn described a game of supply chain whack-a-mole, where a new shortage pops up just as another is alleviated.

“We can’t predict exactly what’s going to be the next problem. But it’s definitely not just semiconductors anymore. There’s copper shortages. We’re seeing shortages even with consumables. Epoxy is having shortages in some cases. There’s shortages all over the place that we just didn’t anticipate,” Govshteyn admitted.

The CEO noted that about 60 percent of MacroFab’s self-service customers are experiencing delays of up to two weeks—not a drastic impact, in his opinion, but one which will linger. “I think it’s going to be the story for a while,” Govshteyn predicted.

The COVID-19 pandemic has caused many to consider the pitfalls of excessive offshoring. Many Americans have called for increased investment in American manufacturing, including President Joe Biden urging U.S. tech and automotive companies to close the gap in semiconductor production currently dominated by China. Most of MacroFab’s customers are American, and Govshteyn is noticing the shift.

“Some of our customers are leaving China entirely, but for a lot of people, that’s just not a reasonable option,” Govshteyn said. “What we do see are customers that are starting to look into diversifying their supply chain. I think the ship has sailed on the era where supply chain managers looked for optimal cost and felt very comfortable single-sourcing from the place where they just got the best unit economics.”

15 Million More for MacroFab

MacroFab’s latest $15M of venture funding comes from investment firms Edison Partners and ATX Venture Partners as well as EDA provider Altium. Altium also happens to own Octopart, a search engine for electronic components that’s integrated on the MacroFab platform. With Altium putting skin in the game, it seems inevitable that more integrations will follow.

“We’ll definitely be doing more together. [Altium] have big plans for what they’re going to do with manufacturing, so we would expect to have more announcements on that front soon,” Govshteyn hinted.

In the meantime, MacroFab will be investing its new funds primarily in its R&D and engineering teams, but also in expanding its operations team and adding more sales and marketing resources. “We expect that we’ll raise more money in the future, but not for another couple of years at least,” Govshteyn concluded.