Novo Tellus backs India semiconductor player

"Tessolve has the potential and opportunity to grow into three times its current size in the next 4-5 years," Nikhil Rajpal, CEO of local electronics maker Hero Electronix, said in a statement. "This capital infusion will provide us with the firepower to make the right organic and inorganic investments to drive towards that goal."

Hero Electronix acquired a majority stake in Tessolve in 2016 at a valuation of $25.5 million. Since then, it claims that Tessolve has grown faster than 30% a year, achieving revenue of $75 million in 2020. During this period, the company opened 15 offices across India, Singapore, Malaysia, Europe, and the US. It now has a 2,000-strong team and a client base said to include eight of the top-10 semiconductor companies globally.

Novo Tellus, which focuses on industrial technology, is an active investor in the semiconductor space, having backed Grand Venture Technology, a similar services provider, earlier this year. Grand Venture is based in Singapore and active across Malaysia and China. That investment coincided with Novo Tellus closing its second Southeast Asia fund at $250 million.

"Having made multiple investments in the semiconductor space through the years, it is clear to us that Tessolve's unique value proposition to its global customers puts it in a great position to benefit from the secular growth trends in semiconductors," Loke Wai San, a co-founder and managing partner at the private equity firm, added.

Tessolve observes that the global semiconductor industry has demonstrated resilience to pandemic-related shocks, having grown 5.4% during 2020 to $442 billion. It expects the market to enter a new phase of rapid growth in the near future as industries from electronic devices to automobiles become increasingly digital and connected.

The company hopes to meet this opportunity by strengthening its offering in chip design, embedded services, and application-specific integrated circuits, which deliver greater computing power and efficiency. This will be achieved in part through an expansion of the team across Southeast Asia, Korea, Japan, Europe, and the US.

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• Topics
• South Asia
• Industrials
• Expansion
• India
• Novo Tellus Capital Partners
• semiconductor
• manufacturing