B2B manufacturing startup Karkhana acquires Micron EMS, targets Rs 200 crore ARR by FY27

Ganesh Subramanian (CFO Karkhana), Kalpana Naagaraj (Managing Director Micron EMS), Sonam Motwani (Founder & CEO Karkhana), Karthik M.C. (Co-Founder & CRO Karkhana)

• Karkhana buys Micron EMS Tech for Rs 10 crore in cash and equity
• Acquisition adds 40,000+ sq. ft. electronics plant
• Karkhana aims to triple revenue and expand exports by FY27

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Bengaluru-based B2B manufacturing startup Karkhana has acquired electronics manufacturing services (EMS) firm Micron EMS Tech Pvt Ltd, marking its shift from operating as a contract manufacturing aggregator to owning production facilities and offering full-stack electronics manufacturing capabilities.

Sources familiar with the matter said the deal size is around Rs 10 crore, structured as a mix of cash and equity.

The acquisition adds a 40,000+ sq. ft. manufacturing facility in Bengaluru equipped with high-speed surface-mount technology (SMT) lines, through-hole PCB assembly and more than 10 box-build lines. The move will allow Karkhana to bring printed circuit board assembly (PCBA), advanced testing and system-level manufacturing in-house.

The move will allow Karkhana to bring printed circuit board assembly (PCBA), advanced testing and system-level manufacturing in-house.

“For the last seven years we have largely operated as an aggregator connecting OEMs with manufacturing partners,” said Sonam Motwani, founder and CEO of Karkhana to Moneycontrol.

“But as the complexity of products increased, we realised that to continue delivering excellence we also needed to start owning capacity, especially in electronics, which accounts for nearly 60–70 percent of the cost of most products.”

The Micron acquisition marks the startup’s first move to directly own shop-floor operations.

Micron brings more than 15 years of manufacturing experience, including established shop-floor processes and operational systems. With the integration, Karkhana plans to combine Micron’s production capabilities with its own strengths in engineering, sourcing and programme management to deliver end-to-end manufacturing services.

Following the acquisition, the combined entity will operate with a 150+ member team across manufacturing, engineering, quality and operations.

Karkhana was founded in 2018 by Sonam Motwani and Karthik M.C. as a B2B manufacturing platform aimed at connecting original equipment manufacturers (OEMs) with a network of contract manufacturers across India. The Bengaluru-based startup initially operated as an aggregation platform, helping companies manage sourcing, engineering, prototyping and production across fragmented manufacturing supply chains.

Focus on EVs, industrial electronics and connected devices

Karkhana currently works with more than 25 original equipment manufacturers (OEMs) and generates most of its revenue from three key sectors: automotive electronics, industrial electronics and connected consumer devices.

“Automotive electronics, especially electric mobility products like charging infrastructure, battery packs and motor controllers, contribute about 40–50 percent of our revenue,” Motwani said.

“Industrial electronics and premium connected consumer appliances are the other two major categories we work in,” she added.

The company plans to deepen its presence in these segments while expanding into sectors such as telematics, medical devices and energy systems.

It is also seeing rising opportunities linked to the rapid expansion of data centres driven by artificial intelligence.

“With AI growing rapidly, the demand for data centres and the energy systems that power them is increasing…A lot of electronics used in those systems is now being manufactured in India, and that creates new opportunities for companies like us,” She said.

Scaling manufacturing and exports

According to Karthik M.C., co-founder and chief revenue officer, owning manufacturing infrastructure also helps improve credibility with global customers.

“If you position yourself purely as an aggregator, customers often take you less seriously for large orders,” he said.

“Owning manufacturing gives legitimacy and acts as an anchor while we continue to leverage our supplier network.”

The company expects around 60–70 percent of production to happen in-house, with the rest continuing through its network of contract manufacturers.

Karkhana is targeting Rs 200 crore in annual recurring revenue (ARR) by FY27, nearly tripling its current scale, driven by new customers and higher-value manufacturing work.

It also plans to expand exports to the US and European markets as global companies diversify supply chains under the China+1 strategy.

Long-term plan to build product IP

Beyond contract manufacturing, the startup aims to evolve into an original design manufacturer (ODM) by developing its own product designs and intellectual property.

“Our long-term vision is to build reference designs for certain product categories and start owning more of the product IP,” Motwani said. “Manufacturing is the starting point, but the goal is to eventually add design, engineering and product development capabilities.”