Steadview, Temasek in talks to invest $50-$60 million in smart fan maker Atomberg at a valuation of $350 million

Smart fan manufacturer Atomberg is in talks to raise $50-$60 million, doubling its valuation to $350 million, sources said, as investors look beyond typical sectors amid a worsening funding winter.

The new round will be led by private equity firm Steadview Capital, with participation from Singapore's Temasek. A91 Partners, which holds a nearly 43 percent stake in the company, may not participate in the round, according to people who requested anonymity. In addition to A91, Atomberg is also backed by Jungle Ventures.

Atomberg, A91 Partners, Temasek, Jungle Ventures and Steadview Capital did not respond to queries from Moneycontrol.

Atomberg's potential fundraise comes at a time when funding to the country's startups has slowed by more than 70 percent over the last three quarters, with investors preferring to avoid high-growth, loss-making technology companies amid macroeconomic headwinds.

“Atomberg is a company that has taken the traditional approach to growth, without burning a lot of money. Expenses mostly centered around growth and investment- for instance, they have spent 30-40 crore to set up a factory, they spend on advertising in regional media networks,” said one of the people quoted above.

“The founders come from IIT and have put a lot of time and effort into research and development. Fans are a Rs 10,000-12,000 crore market in India and Atomberg is competing with traditional companies like Havells in the premium category with their smart fans. They have grown 100 percent every year, over the last three years and are on track to achieve revenue run rate of about Rs 650 crore ($90 million),” the person added.

According to the person, the premium category space is not crowded in India, giving Atomberg a potential growth opportunity. The company has now expanded into other categories such as mixer grinder and will use the funds raised for that, the person said. To be sure, Atomberg had announced venturing into new categories including mixer and grinders when it last raised funds in December 2021.

Atomberg, which manufactures smart fans with features such as smart remote control, sleep mode, voice control, and boost mode, was founded in 2012 by IIT alumni Manoj Meena and Sibabrata Das and has raised $45 million in funding to date. The company has an online presence as well as an offline distribution network of 8,000 counters in 150 cities.

The company also has a fully integrated manufacturing facility at Navi Mumbai with a capacity of 1,50,000 fans a month, the company had said during its last fundraise.

In December 2021, Atomberg raised $20 million as a part of its Series C funding round led by Jungle Ventures at a valuation of $150 million, according to data available on private market intelligence platform Tracxn Technologies.  A91 Partners and angel investor Ramakant Sharma participated in the round.

The startup has invested a lot of time in R&D and developed a BLDC motor (Brushless DC Motor) that is energy efficient and heats up less, giving the company an opportunity to play around with the design of the fan, making it aesthetically more pleasing, while also adding more features.

In FY21 (2020-21), the company recorded operating revenue of a little more than Rs 140 crore, which had grown more than twofold over FY20 (2019-20). However, its loss widened to Rs 39.2 crore from Rs 13.3 crore as it doubled its spending on employees, according to the company’s filings with the Ministry of Corporate Affairs (MCA).