Mumbai: Sankalp Semiconductor, a Hubli-based semiconductor design service company, has raised $5 million from Stakeboat Capital, a senior executive of the company said.

Founded in 2005, Sankalp is one of the largest independent analog and mixed-signal semiconductor design services companies in India. The company has operations in the US, Canada, Bengaluaru, Hubli and Kolkata.

The fundraising marks the first institutional funding for Sankalp. A significant portion of the funds raised will go towards a secondary purchase of shares from some existing shareholders of Sankalp.

“This is the first time Sankalp Semiconductor has raised money. Majority of the funds will be primarily used for buying out some of the existing stakeholders and some portion will come into the business," said Nagaraj Azhakesan, chief operating officer of Sankalp Semiconductor.

The company will also use the funds to hire more engineers as its looks to grow its business in the coming years.

“We are a 600 plus people company right now and we want to grow it to 1,000 people company in the next two years. The idea is to make successful tier-2 city company in the high technology domain. We are making new recruitments typically from tier II and tier III city colleges; so that we create employment locally there instead of moving everybody to the biggest cities," said Azhakesan.

Sankalp today serves over a dozen customers from various industries. The company has a revenue of over Rs100 crore.

“Our customers are big multinationals primarily in the chip design industry. We currently have around 15 clients. Eighty-ninety percent of our revenues are generated from repeat customers. We will have multiple projects running for each of these customers. Some of these customers have been working with us for the last 12 years," said Azhakesan.

The end use of the company’s designs are in automotive, consumer electronics, industrial internet of things (IoT) and medical electronics space, he said.

While there is enough room for growth for Indian semiconductor design services firms, Azhakesan said that investment in domestic manufacturing could boost growth for the sector.

“From a design perspective, I don’t see any dearth of opportunities as our industry is growing, but what we are lacking in India, from an infrastructure perspective, is that we don’t have manufacturing facilities. Growth will be much higher and there will be lot of opportunity in market because your consumption will go and your cost of production will come down significantly," he said.

Sankalp is the second investment for Stakeboat Capital, the venture capital firm started by Trivitron Group chairman G.S.K. Velu. Stakeboat is looking to raise $100 million for its first fund, which it plans to invest in small and medium enterprises in sectors such as healthcare services, consumer-centric businesses and enterprise technology.

Stakeboat Capital’s other investment is Leixir Dental Laboratories. Leixir is a dental technology and device manufacturing company with operations in the US, Canada and India.