Next Orbit launches $750-m fund for electronics sector

Our Bureau Mumbai | Updated on January 22, 2018

Piggybacking on government's decision to develop an Electronic System Design & Manufacturing (ESDM) sector in the country, Mumbai-based VC fund Next Orbit Ventures (NOV) has launched a $750 million (₹4,950 crore) fund to invest in start-ups in that ecosystem. This money has been raised from institutional funds and NHI’s from India, the US and Gulf countries.

Launched in 2013, NOV’s first fund of $150 million was sector agnostic and it has invested in 15 consumer focused start-ups.

Ajay Jalan, Founder, NOV, told BusinessLine that the fund will be investing in about 15 start-ups including chipmakers and design firms. Besides, it will also invest in semiconductor fab, science parks, solar and LED fab, IoT, healthcare and other critical ESDM products. Part of the investment will also go in a consortium that has been mandated by the government to put a wafer fabrication plant.

“India is on the threshold of experiencing a third industrial revolution to create the ESDM ecosystem in the country. This is arising out of the need to create ‘Make in India’ chips and electronic products the strategic sectors in wake of the national security as most of these chips are used in the defence, space atomic energy and cyber security,” Jalan said local manufacturing will preserve the precious foreign exchange and national security need of the country.

The ESDM sector will help reduce the country’s dependency on imports and hence will result in electronics products getting cheaper as they would be manufactured in the country itself. At present, India imports electronics products worth $90 billion annually from countries such as China and Taiwan.

As per the National Policy on electronics, 2012, India needs $400 billion worth of electronics production capacity to meet the consumer demand by 2020, which will entail $100 billion investments and creation of 28 million jobs in this sector.

The government, as a part of its Digital India Agenda, has envisaged developing the ESDM sector to achieve net zero imports by 2020. As part of this initiative, the Ministry of Communication and Information Technology has also appointed CanBank Venture Capital Fund Ltd (CVCFL) as Fund Manager to house and manage the Electronics Development Fund.

EDF will provide risk capital to companies developing new technologies in the area of electronics, Nano Electronics & Information Technology. The government is focused on reducing reliance on imports in this sector by promoting indigenous manufacturing.

Published on November 24, 2015

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