ideaForge investor Celesta Capital is looking to invest in 10-15 Indian startups engaged in semiconductor design and deep technology such as artificial intelligence in next to three years, the venture capital firm’s senior partner Gani Subramaniam told FE.
The US-based firm has four funds totalling about $1 billion and two of these are India-focused. The average ticket size Celesta is looking to invest is about $7-$15 million.
Subramaniam said India has seen a majority of investments in consumer tech startups. “We have not seen investments in the deep-tech and semiconductor design space, and Celesta is focused on that,” he said.
“There is a lot of risk capital available in India given the government’s push in sectors like semiconductor. India has an advantage both to tap the global competitive businesses with its technology solutions as well as cater to its own demand,” Subramaniam said, adding that the company is looking to invest in 10-15 startups over the next a few years.
He said while investing in startups in the semiconductor space, Celesta looks for a right set of team with experience, openness to acquire talent from across the world and clarity over where chips will be produced.
“India has the second biggest collection of chip designers after the US. With companies like Qualcomm and Intel working on critical component design, there is a 40 years of chip design experience in India,” Subramaniam added.
When asked about the investment plan in early-stage startups in the semiconductor space, Subramaniam said Celesta has not ruled out that but with government support and a lot of seed funds, there is already capital available and it is more interested in bridging the gap at the later stages of business cycle.
With regard to higher valuation of Indian startups and corporate governance issues, Subramaniam said valuations are fair in the deep technology space, where Celesta is focused.
“Deep-tech by nature takes a lot of time. There is a silence of five years on revenue earning and post that some results start appearing,” Subramaniam added.
Between the US and India, Celesta has invested in about 95 companies and exited 27 of them. Its 15% of the total investments are in India.
Among the first few investments in India in the semiconductor design space, Celesta had invested in Aura Semiconductors, which is a fabless IC design company providing high performance products in IoT radios, enterprise timing and portable audio markets.
Of the total portfolio companies, 11 are valued at over $1 billion, four at $500 million and 37 at over $100M. Twenty-eight companies are valued at least three times the firm’s entry valuation, Celesta Capital said.
Apart from ideaForge in India, Celesta has invested in startups like Arzooo, Stellapps, Pixis, Connect and Heal.