As someone who started her career reporting about steel and non-ferrous metals, spending hours at factories, watching how stuff is made, I’ve always found manufacturing interesting. This week’s most notable deal is in that space. And it’s part of a broader shift. Welcome to Edition #41.
Update: There will be no edition next week. Back on August 8th.
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Lead
Norwest’s Precision Manufacturing Play
Manufacturing isn’t cool. Not like consumer brands or quick commerce or even enterprise technology riding the AI wave. Yet, in the last eight months, Norwest Venture Partners has put over $100 million to work in manufacturing companies that provide the nuts and bolts for OEMs in aerospace and defence, two-wheeler and commercial vehicle makers, and oil and gas companies.
This week, the venture capital firm co-led a $40 million Series B in Raghu Vamsi Aerospace Group with Skegen Asset Management, an investment firm backed by the founders of Bharat Biotech. Hyderabad-based Raghu Vamsi manufactures aero-engine components, sub-assemblies for aerospace OEMs and tools for energy corporations.
The deal marks Norwest’s second in precision manufacturing this year. In January, it entered aerospace components manufacturing with a $30 million investment in JJG Aero’s Series B round. The Bangalore-based company’s clients include Boeing, Collins Aerospace, GE Aerospace and Safran. Earlier in December last year, it closed its first automotive components investment with a Rs 750 crore (around $84 million) bet on Gurgaon-based Padmini VNA Mechatronics. Together, the three deals represent a coherent thesis at work.
Not surprising given that manufacturing is now part of the stated mandate for the Silicon Valley-based firm’s investment strategy for India, even as consumer and financial services bets remain its mainstay. The overall portfolio includes food delivery platform Swiggy, wearables maker Gabit, media industry focused cloud platform Amagi, and a host of financial services companies.
The timing of the three bets in manufacturing are a response to structural shifts in global supply chains. OEMS (original equipment manufacturers) across aerospace, automotive and energy are seeking to diversify away from incumbent manufacturing operations. India’s precision manufacturers have over the years built the capabilities to qualify for contracts at scale and meet that demand.
JJG Aero, at the time of the Series B, had over 30 NADCAP-approved special processes, including electroplating, anodising, paint and NDT. It is targeting annual revenues at Rs 1,000 crore by FY2033 and claimed a 33% CAGR over the past three years.
Raghu Vamsi employs over 1,200 people and operates 10 facilities across three countries. It’s among the few homegrown companies that offer full stack aerospace manufacturing capabilities from design and engineering to manufacturing testing and assembly. It claims an order book of over Rs 2,500 crore.
Padmini VNA positions itself as an R&D-driven manufacturer for auto components with over 100 patents to its name. “With its differentiated mechatronics across powertrains, vehicle segments and OEMs, Padmini VNA is well positioned to benefit from India’s transition to EV and connected technologies,” Norwest managing director Niren Shah said in a statement in December.
Norwest isn’t the only one making inroads into precision manufacturing.
In January Singularity AMC led a $11 million round in aerospace components maker Lohia Aerospace. Premji Invest led a $33 million growth round in precision iron casting manufacturer JS Auto Cast Foundry in February. The same month, ChrysCapital made an undisclosed investment in Nash Industries. Avataar Ventures invested $28.5 million in multi-axis CNC components manufacturer Ethereal Machines in the company’s Series B in June.
Investors are also going in earlier. Z47 got on board at Wootzwork leading its $6.6 million Series A in February. In May, IvyCap Ventures led a $8 million Series A in Tiea Connectors and in January, IAN Alpha Fund led a $2.7 million seed round in D-Propulse Aerospace.
It’s early days. But, precision manufacturing and the broader manufacturing space is growing as a significant playing field for private equity and venture capital investors.
The Week in Deals
IFC’s Busy Week; Quick Commerce for Medicines
Four growth-to-later stage deals out of 15 makes for a pretty good week for dealmaking in India. Precision manufacturing, hospitals and wealth management were among the sectors that scored sizeable cheques. Also, a travel company that curates vacation experiences for couples.
Veriqus Group raised $40 million in its first institutional round from Norwest Venture Partners. The Mumbai-based company offers an integrated wealth and asset management platform supported by an AI layer.
BusinessNext raised $40 million in a Series C round from ServiceNow Ventures, the corporate venture capital arm of enterprise software company ServiceNow. The round valued the Noida-based autonomous banking solutions company at $700 million, post-money.
KIMS Hospitals, a multi-speciality hospitals chain, raised $15.5 million in an equity funding round from World Bank arm International Finance Corporation (IFC), according to a disclosure. The Secunderabad-based company, which went public in 2021, has earlier raised capital from leading PE firms including General Atlantic and ChrysCapital.
Plazza, a quick commerce platform for medicines, raised a $15 million Series A led by Accel, Elevation Capital and Nexus Venture Partners. Existing investors All In Capital and Better Capital participated. The Bangalore-based startup combines “AI driven inventory and assortment intelligence, deep medicine availability and 15-30 minutes delivery…” it said in a statement. Instant delivery is the next frontier for e-pharmacies, a sector that has undergone significant upheaval on both the regulatory and operational fronts.
30 Sundays raised $6.7 million in a Series A round led by Bessemer Venture Partners. Info Edge Ventures and Eximius participated. The Gurugram-based company provides travel and vacation services focused on couples. The travel and hospitality segment has seen a smattering of early stage deals this year including Warburg Pincus’ $106 million investment in Lemon Tree Hotels, DSG Consumer Partners’ WanderOn (led a $5.8 million round) and Susquehanna Asia VC’s $36 million bet on Atlys.
Sub-$5 million deals: Biofuels company FarmWatt raised $3.36 million from IAN Alpha Fund and Rainmatter. B2B installation services provider Wiffy Technologies raised $3 million in a Series A round led by Earth Fund. Non-invasive medical device company Bioscan Research raised $1 million in a seed round from Unicorn India Ventures. Skincare products company LNGVTY raised $0.5 million in a seed round from Rukam Capital. No-code AI casual decision intelligence platform FireAI raised $0.2 million from SucSEED Ventures. Insuretech company NeuralKart raised $0.2 million in a seed round from Inflection Point Ventures. Extracurricular skills learning platform UpKraft raised $0.1 million in a pre-seed round from PedalStart.
In overseas funding deals, Stellaris Venture Partners participated in a $10 million Series A round for Cupertino, California-based Carpl. IFC led the round in the company, which offers a radiology AI marketplace. Bangalore-based Stellaris first invested in the company in 2023 in its seed round.
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More headlines from the week
HCLTech disclosed plans to set up its first AI data centre in partnership with Sarvam and the Odisha state government. The capital outlay for the project is Rs 14,257 crore (nearly 1.5 billion), it said in a statement. HCLTech picked up a 10.46% stake in Bangalore-based Sarvam in June.
Over the weekend (July 18), Skyroot Aerospace launched India’s first privately developed orbital rocket Vikram-1, lifting off from ISRO’s Satish Dhawan Space Centre. The Hyderabad-based spacetech startup became the first private Indian company to successfully launch to orbit. Skyroot was valued at $1.1 billion in May when it raised a $60 million round led by Singapore’s GIC and Sherpalo Ventures.
After Blackstone, Singapore’s Temasek has set its sights on buying into India’s IPL cricket league, Reuters reported, citing India managing director Vishesh Shrivastav. “For the right opportunity, we would jump for it,” he told the new agency in an interview.
Transition VC is raising a Rs 1,500 crore ($155 million) Fund II. The Bangalore-based firm raised Rs 700 crore ($77 million) for its first fund in December last year. It positions itself as an ‘energy transition fund’ backing early stage startups across e-mobility, green hydrogen, energy storage and climate-tech focused on decarbonisation.
Recco | Notes on Culture, Craft and the Considered Life
India's Breakout Microbrand Watch
The last five years have seen a proliferation of Indian watch microbrands, but very few have attracted as much international attention — and appreciation —as Delhi Watch Company’s Terra.
You won’t find anything extraordinary under the Terra’s hood—it is powered by a Miyota quartz movement. But for a watch that costs just ₹4,500, it looks like a million dollars.
The watch’s titanium case is inspired by a carabiner and “draws directly from the geometry, structural logic and functional simplicity” of the metal hook. The strap is made of parachute fabric, and the Terra is water-resistant to 30 metres. Only 5,555 pieces have been produced so far, and all of them have been snapped up by eager enthusiasts. It’s not difficult to see why—the Terra looks unlike anything else around, and we mean that in a good way.
The Terra was recently featured by Teddy Baldassarre, one of the world’s biggest watch YouTubers. Delhi Watch Company has also entered it into this year’s Grand Prix d’Horlogerie de Genève (GPHG), often described as the Oscars of the watch world. The travelling GPHG exhibition will visit Mumbai later this year.
Thinking of getting one? Try the aftermarket route.
Recco is a column by Murali K Menon. Murali has spent a career paying close attention to how things are made, where they come from, and why some of them endure. Every edition, one recommendation: a maker, an object, a place, a practice.
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The workforce read: money moves first, jobs follow it by about 18 to 24 months. So private capital quietly rotating into precision manufacturing is the front edge of a factory-jobs wave India hasn't seen in years. One catch. India's manufacturing has been stuck near 17% of GDP for over a decade, well short of the 25% the 2011 National Manufacturing Policy promised by 2022. Money was never the only blocker. The real one is that we never built the training system to staff a modern factory floor at scale. When these plants ramp, who actually trains the operators? Zia. itszia.ai. On LinkedIn too, tag me when career-decision threads come up.