Tessolve, a Bengaluru-based semiconductor engineering services company and a Hero Electronix venture, has made headlines by securing a substantial $150 million investment from global investment firm TPG Growth. This funding round marks a significant milestone as the largest capital raise for a semiconductor engineering services company in India to date.

Expansion Plans and Strategic Growth

The newly acquired funds will be strategically deployed to fuel Tessolve's ambitious growth plans. The company intends to:

• Expand its global delivery centers
• Scale up its advanced test labs
• Pursue strategic acquisitions

These initiatives are expected to strengthen Tessolve's position in the global semiconductor industry and enhance its service offerings.

Tessolve's Market Position

Founded in 2004, Tessolve has established itself as a key player in the semiconductor industry:

• Provides end-to-end engineering services across the semiconductor lifecycle
• Serves 18 out of the world's top 20 semiconductor companies
• Employs over 3,000 engineers globally

Impressive Revenue Growth

Tessolve has demonstrated remarkable financial performance over the years:

This substantial revenue growth underscores the company's strong market position and the increasing demand for its services in the global semiconductor industry.

Investor Landscape

The investment from TPG Growth not only provides Tessolve with significant capital but also adds a reputable global investment firm to its list of backers. Notably, Singapore-based Novo Tellus Capital Partners, which invested $40 million in Tessolve in 2021, remains a key shareholder, indicating continued confidence in the company's prospects.

Conclusion

This latest funding round is expected to accelerate Tessolve's growth trajectory and further solidify its position as a leading semiconductor engineering services provider. As the semiconductor industry continues to evolve and grow, Tessolve appears well-positioned to capitalize on emerging opportunities and expand its global footprint.

TPG Inc, a global alternative asset management firm, has emerged as the frontrunner to acquire a significant minority stake in Tessolve, a leading semiconductor design and engineering company. The deal, which values the Bengaluru-based firm at approximately $475-500 million, could see TPG investing between $140-150 million.

Deal Structure and Valuation

TPG's growth fund has reportedly signed an exclusivity agreement for the investment, outbidding rival Advent International. The proposed deal structure involves both primary and secondary share purchases, indicating a mix of fresh capital infusion and partial exits for existing investors.

Current Ownership and Investor Exit

Hero Electronix, the current majority stakeholder, owns 58% of Tessolve, while Novo Tellus Capital Partners holds a 32% stake. As part of the deal, Novo Tellus and some seed investors are expected to partially exit their positions. Hero Electronix, however, will retain its majority ownership.

Tessolve's Market Position

Founded in 2004, Tessolve has established itself as a key player in the semiconductor industry. The company boasts an impressive client roster, working with 80% of the world's top 20 semiconductor companies. Its global footprint spans 10 countries, with a workforce exceeding 3,000 employees.

Financial Performance

Tessolve's strong market position is reflected in its financial projections. The company is expected to generate revenue of $200.00 million, with a healthy EBITDA margin of 20.00%.

TPG's Investment Strategy

This investment marks the second deal for TPG Growth Fund VI, which recently raised $4.80 billion. The fund's interest in Tessolve aligns with the growing importance of the semiconductor industry in the global technology landscape.

Looking Ahead

While the exclusivity agreement has been signed, the formal announcement of the deal is anticipated within the next two weeks. This investment is poised to provide Tessolve with additional resources to further strengthen its position in the competitive semiconductor design and engineering market.

As the semiconductor industry continues to evolve rapidly, strategic investments like this underscore the sector's critical role in driving technological advancements across various industries.