Tessolve, a Hero Electronix venture, has raised $40 million from Novo Tellus Capital Partners, a leading private equity firm based out of Singapore at a $100-million valuation. Tessolve is a global provider of engineering and research and development services to semiconductor companies. The funding will be used by Tessolve to drive further growth through acquisitions and organic investments.
“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,” said Ujjwal Munjal, founder director, Hero Electronix. “Their sector expertise and experience in building technology leaders should be a great asset to Tessolve.”
Last year in March, Tessolve acquired UK-based Test & Verification Solutions (T&VS), a leading provider of chip design services. In 2017, Tessolve acquired Spectrum Integrated and analog design business of Analog Semiconductors and test lab business of Lynxemi Pte. In 2016, it bought TES DST.
Since a majority investment by Hero Electronix in 2016, Tessolve has witnessed a year-on-year growth rate of over 30 per cent, 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. Its offerings range from designing chips, testing chips and product engineering to designing electronic products. The firm has grown into an over-2,000-employee organization and has significantly expanded its global presence with 15 offices across the US, 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.
“We are excited to be an equity partner to Hero Electronix in working with the Tessolve management team to further scale the company,” said Wai San Loke, co-founder and managing partner, Novo Tellus Capital Partners. “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 pandemic, the semiconductor industry has exhibited strong resilience growing 5.4 per cent to $442 billion in 2020. The industry is expected to enter into a phase of rapid growth, as billions of devices are becoming smart and connected and industries like 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 said it was uniquely positioned to capitalise on this opportunity as the engineering partner of choice for semiconductor firms so it could bring products to the market faster and more cost-efficiently. The funding raised would be strategically deployed by Tessolve to strengthen its capabilities across chip design and embedded services offerings and to expand its ASIC design business. Further, the company plans to scale up its India operations by further investing in local talent development. It would also strengthen its global presence in key markets across the US, Europe, Southeast Asia, Korea and Japan.
Nikhil Rajpal, chief executive of Hero Electronix, said Tessolve had the potential and opportunity to grow into thrice 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 Rajpal.
Srinivas Chinamilli, CEO of Tessolve added this investment was a validation of the hard work done by Tessolvians (employees) in building the company into a global leader in semiconductor engineering. “Our vision is to partner with our customer from concept to silicon and this investment would help us to get to that vision faster,” said Chinamilli.