Spreadtrum commits $10m to India’s PE-backed Micromax
Chinese semiconductor manufacturer Spreadtrum Communications has invested $10 million in PE-backed Micromax Informatics, one of India’s largest mobile phone brands. As part of the deal, the companies have established a partnership that will see Spreadtrum become one of Micromax’s preferred mobile chipset suppliers.
Micromax claims to be the third largest handset manufacturer in India and the 12th largest globally. It ships 4 million handsets quarterly to the likes of Hong Kong, Bangladesh, Nepal and Sri Lanka as well as supplying the domestic market. The company focuses on delivery localized products at affordable prices.
Micromax was planning an IPO in 2010 but pulled out due to weak market conditions. Sequoia Capital, Sandstone Capital and Madison India Capital acquired a 5.75% stake in the company in September 2010 in anticipation of a listing, according to VCCircle. TA Associates was another investor, taking the total sum raised from private equity to $88 million, most of which financed a partial exit for the company founders.
"We focus on delivering innovation to the consumer at affordable prices, and our partnership and collaboration with Spreadtrum supports our objectives of feature customization to local needs, rapid time to market, and innovation on value for money platforms," said Rajesh Agarwal, managing director of Micromax, in a statement.
He added that the Indian mobile industry is growing at a rate of 12% per year and the partnership should allow the company to capture more of the domestic market in addition to expanding distribution overseas.
Dr Leo Li, president and CEO of Spreadtrum, said: "Our mutual cooperation with Micromax will help us expand our reach in emerging markets and ensure that our R&D investments are closely aligned with the world's leading brands."
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