Hero Electronix’s Tessolve Raises $40 Million Funding From Novo Tellus

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The company aims to reach a USD 250 million revenue milestone in the next five years

Hero Electronix venture Tessolve announced that it has raised USD 40 million from Singapore-based private equity firm Novo Tellus Capital Partners. With this, Tessolve, which offers engineering and R&D services to semiconductor companies around the world, has reached a firm valuation of USD 100 million.

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This funding will be used by the company to drive further growth through acquisitions and organic investments. 

Ujjwal Munjal, founder and director of 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.”

“Since a majority investment by Hero Electronix in 2016, Tessolve has witnessed a year-on-year growth rate of over 30 per cent, clocking USD 75 million in revenues in 2020,” Hero Electronix CEO Nikhil Rajpal told.

Tessolve’s offerings range from designing and testing chips and product engineering to designing electronic products. It has expanded into an over 2,000-employee strong organisation with offices across the US, India, Singapore, Malaysia, Europe, the UK and Taiwan.

Despite the COVID-19 pandemic, the semiconductor industry has exhibited strong resilience, growing 5.4 per cent to USD 442 billion in 2020. With the number of smart and connected devices surging across all platforms and given the revolutionary phase that the automobile sector finds itself in, especially with the growth of electric and hybrid vehicles, the chip industry is poised to witness a massive growth in demand. 

As such, solutions like the ones provided by Tessolve have become the need of the hour for semiconductor companies.  

“Tessolve is uniquely positioned to capitalise 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 will be deployed to strengthen capabilities across chip design and embedded services offerings, as well as the ASIC design business,” Rajpal said.

Expansion Plans

Rajpal also spoke about the company’s future plans to scale up its India operations by further investing in local talent development and strengthening its global presence in key markets across the 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,” he added.

In March last year, Tessolve had acquired UK-based chip design services provider Test & Verification Solutions (T&VS) for an undisclosed amount. 

It had also acquired TES DST in 2016, Spectrum Integrated and Test lab business of Lynxemi Pte in 2017, and Analog design business of Analog Semiconductors in 2017.

The company aims to reach a USD 250 million revenue milestone in the next five years.

“We have several pieces, there are some missing pieces on the design side, we hope to acquire that as well as build more capabilities onshore. That is what the capital is for – two or three small acquisitions,” Rajpal said.

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