Next Orbit Ventures, a Mumbai-based venture capital firm is reportedly in talks with a few UAE investors to raise funds for its $750 Mn plus fund. As mentioned in an official statement, 18 UAE entities like Mubadala, DP World, Etisalat, Emmar etc., have shown keen interest in investing in this fund and its project. 49% of the commitment is expected from the Government of India (GoI), as NOVF has already been selected as the ‘Daughter Fund’ under GoI’s Electronics Development scheme. Dubai-based IBMC Financial Professionals Group is the advisor to this second $750 Mn ESDM fund for Gulf Cooperation Council (GCC).
Launched in November last year, the fund is focussed on electronic system design and manufacturing (ESDM) sector including electronic components (semiconductor & active), electronic products (IoT/ solar / LED / health care), semiconductor design services, and electronic manufacturing services. It aims invest mainly in firms that make semiconductor chips, and solar and LED components. Further, it will also be investing in a strategically important project for India to reduce its electronics imports which can reach $300 Bn from current $90 Bn in 2020. Ajay Jalan, founder and managing partner at Next Orbit said, “This investment spree in India follows the ‘Digital India’ and ‘Make in India’ programmes of the Government of India which are providing economic, skill development and tax incentives to electronics manufacturing. The project will provide more than 28 Mn jobs in the country and also will be a second source of quality supply of electronic, Led, and solar products which is currently dominated by cheap Chinese products.”
NOV has already committed to seed invest $100 Mn (INR 700 Cr) equity investment in the first phase which includes equity of $5.6 Bn digital fabs in technical collaboration with AMD of USA and ST Microelectronic of France. The project will commence at Prantiz near Ahmedabad, Gujarat. GoI has identified 1,200 acres of land in Prantiz and has already started developing the necessary infrastructure to make it a manufacturing hub. “We are coming as first investors into this fab project to back India’s growing electronics market, which will reach $400 Bn by 2020 as per the estimates of Government of India’s national policy of electronics 2012, and requires $100 Bn of investment for achieving ‘zero import’ target,” said Ajay.
Next Orbit Ventures was started in 2014 with its first $100 Mn (INR 700 Cr) fund. To date, it has invested in MSME companies in consumer products and services and Internet & technology support services that will create the demand for semiconductor chips in India. Recently, in April 2016, it also pumped in $17.2 Mn in Infibeam’s IPO for a 5% stake.