The funding raised will be strategically deployed by Tessolve to strengthen their capabilities across chip design and embedded services offerings, and expand its ASIC design business.
Hero Electronix venture Tessolve, a provider of engineering and R&D services to semiconductor companies, has raised $40 million from Singapore-based private equity firm Novo Tellus Capital Partners at a $100 million valuation. The funding will be used by Tessolve to drive further growth through acquisitions and organic investments.
Since a majority investment by Hero Electronix in 2016, Tessolve has witnessed a year-on-year growth rate of over 30%, achieving $75 million in 2020 revenues. It has transitioned from a semiconductor test services provider to a provider of complete engineering solutions to semiconductor companies. Offerings range from designing chips, testing chips, product engineering to designing electronic products. It has grown into an over 2,000 employee organization and has significantly expanded its global presence with 15 offices across the United States, India, Singapore, Malaysia, Europe, the UK, and Taiwan. Its client base includes leading marquee names from the technology industry including eight of the top 10 semiconductor companies.
Talking about this key development, Ujjwal Munjal, Founder Director, Hero Electronix, said, “We are delighted to welcome Novo Tellus as a key partner in the journey to build Tessolve into the largest global provider of semiconductor engineering services. Their sector expertise and experience building technology leaders should be a great asset to Tessolve.”
Wai San Loke, Co-Founder and Managing Partner, Novo Tellus Capital Partners, said, “We are excited to be an equity partner to Hero Electronix in working with the Tessolve management team to further scale the company. 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.”
Despite the COVID-19 pandemic, the semiconductor industry has exhibited strong resilience, growing 5.4% to $442 billion in 2020. Looking ahead, the industry is entering an exciting phase of rapid growth, as billions of devices are becoming smart and connected, and industries such as automotive undergo huge transformation due to electric and autonomous vehicles. Given this surge in demand, semiconductor firms are increasing their engineering investments to develop new technologies and rapidly launch more products.
Tessolve is uniquely positioned to capitalize on this opportunity as the engineering partner of choice for semiconductor firms so they can bring products to market faster and more cost efficiently. The funding raised will be strategically deployed by Tessolve to strengthen their capabilities across chip design and embedded services offerings and expand its ASIC design business. Furthermore, the company plans to scale up its India operations by further investing in local talent development and strengthen its global presence in key markets across US, Europe, Southeast Asia, Korea and Japan.
“Tessolve has the potential and opportunity to grow into 3X its current size in the next 4-5 years. This capital infusion will provide us with the firepower to make the right organic and inorganic investments to drive towards that goal,” said Nikhil Rajpal, CEO, Hero Electronix.
Srinivas Chinamilli, CEO, Tessolve, added, “This investment is a validation of the hard work done by Tessolvians in building the company into a global leader in semiconductor engineering. This will accelerate our goal of becoming the #1 value add partner for our customers in providing end to end ASIC solutions and beyond including chip design, test & product engineering, and embedded systems development.”