Next Orbit Ventures, a Mumbai-based venture capital firm which is focused on electronic system design and manufacturing sector, has gotten commitment from UAE based undisclosed investors for its whopping $750 million plus fund.
The fund is being set up for the investment in digital, analog and solar fabrication projects along with semiconductor design, electronics, led and solar products to feed those fabs.
Next Orbit has been raising the fund from investors in India and abroad. The investors from UAE International Investors’ Council, which includes 18 UAE entities like Mubadala, DP World, Etisalat, Emmar etc. have shown keen interest in investing in this fund & its project.
Around 49% of the commitment is expected from the Government of India, as Next Orbit Ventures has already been selected as the ‘Daughter Fund’ under GoI’s Electronics Development scheme and for investing in the strategically important project for the country to reduce its electronics imports which can reach $ 300 bn from current $ 90 bn in 2020.
The fund comes at a time when demand for electronics products in increasing in India. The Indian government estimates domestic demand for electronics to reach $400 billion by 2020. Local output is estimated to cover only a fourth of the demand, and imports will make up the remaining.
Ajay Jalan, founder and managing partner at Next Orbit, said,
This investment spree in India follows the ‘Digital India’ and ‘Make in India’ programs of the Government of India which are providing economic, skill development and tax incentives to electronics manufacturing. The project will provide more than 28 million jobs in the country and also will be second source of quality supply of electronic, LED and solar products which is currently dominated by cheap Chinese products.
The VC firm had launched its second fund in November, to invest mainly in firms that make semiconductor chips, and solar and LED components. It has already committed to seed invest $100 million equity investment in the first phase equity of $5.6 billion digital fabs in technical collaboration with AMD of USA and ST Microelectronic of France.
Ajay Jalan, who was instrumental in drafting Government of India incentive policy in 2007 for semiconductor manufacturing, said,
We are coming as first investors into this fab project to back India’s growing electronics market, which will reach $400 billion by 2020 as per the estimates of Government of India’s national policy of electronics 2012, and requires $100 billion of investment for achieving ‘zero import’ target.