Industry
Zetwerk aims to make servers in India from FY26, co-founder Rahul Sharma says
Summary
- The Bengaluru-based startup is also expanding its laptop production capacity in the country to contract-manufacture the devices for global brands
Bengaluru-based electronics manufacturing startup Zetwerk aims to start making servers locally next financial year and is expanding its laptop production capacity in the country to contract-manufacture the devices for global brands, co-founder Rahul Sharma said.
The company, set up in 2018 and which counts IndiGo co-founder Rakesh Gangwal among its investors, is nearing partnerships with entities from Taiwan, Japan and South Korea for venturing into making automotive electronic parts and charging infrastructure for electric vehicles (EVs) and electronics used in defence equipment. It will begin with providing the new facilities in India soon as it aims to create the partnerships within the next six months.
“Our mission is to be in the major segments across the industry and use the ‘Make in India’ opportunity in the electronics space which we feel is a once-in-a-lifetime opportunity. Supply chains move every few decades, this time they’re moving to India, and we want to leverage this with the help of government policies to become one of the companies that is able to create a name for itself in the space," Sharma told Mint in an interview.
Also read | Zetwerk charts ₹1,000 crore game plan for electronics manufacturing
“In the next two quarters, MoUs (memorandums of understanding) with global firms from Korea, Japan and Taiwan will be signed, through which we will get into new sectors of automotive and defence electronics. In the next financial year, we’re looking at making servers locally and we will also expand our laptop manufacturing capacities. Discussions with brands for laptops are already on," he added.
The contract manufacturer operates four of its own manufacturing units, besides subcontracting production of mobile phones and laptops to other suppliers. It is an original design manufacturer for TVs, tablets, personal computers, hearables and wearables. It recently expanded its manufacturing facilities through a strategic partnership with electronics manufacturing services firm Smile Electronics to launch three facilities making information technology (IT) hardware in Bengaluru, Chennai and one in Andhra Pradesh, which is expected to come up early next year.
Automotive electronics will include components for EVs and charging infrastructure for state-run oil companies Indian Oil Corp. Ltd and Hindustan Petroleum Corp. Ltd, while defence electronics will be components used in manufacturing of defence hardware.
Read more | IndiGo co-founder Rakesh Gangwal invests $20 million in Zetwerk
Sharma added that investment into diversification into new segments would be part of the ₹1,000 crore earmarked by the company for expanding into electronics across segments. Expecting its revenues to grow by 20-30% in fiscal year 2024 (FY24) versus FY23, Sharma said the company was well-funded with a healthy mix of debt and equity and therefore would not need fresh investments for sometime. The company has raised $650 million till date, including a recent $20 million round from Gangwal.
However, the company could tap into the fresh set of incentives being planned by the government for manufacturing of electronics components. “Incentives through the phased manufacturing programme and production-linked incentives (PLI) would help startups, but the incentives should be given in proportion to the investment and efforts being put in by the company," he said.
Zetwerk’s manufacturing facilities in the US, Mexico and Europe will complement India factories, enabling it to export to global markets.
