IIT Bombay Prof's startup Sedemac Mechatronics in talks to raise $100 million from A91, Xponentia, 360 ONE Asset

Sedemac founders Manish Sharma, Amit Dixit and Shashikanth Suryanarayan. (Image Courtesy: Sedemac Website)

Pune-based Sedemac Mechatronics, an auto parts and powertrain controls manufacturing firm, is in talks to raise $100 million from A91 partners, Xponentia Capital Partners and 360 ONE Asset, sources have told Moneycontrol, underscoring investor interest in the auto space.

The round is likely to close at a valuation of $250 million, one of the sources said.

Incubated in a lab at the Indian Institute of Technology-Bombay (IIT-B) Sedemac has development and manufacturing facilities in Pune. Sedemac, A91, Xponentia and 360 ONE Asset did not offer comments for this story.

Sedemac, A91 and Xponentia did not respond to Moneycontrol's queries.

Sedemac Mechatronics, an acronym for Separating Decision Making from Actuation, the principle behind mechatronics, the technology that combines electronics and mechanical engineering, was founded in 2007 by Shashikanth Suryanarayanan along with his students, Pushkaraj Panse, Amit Dixit and Manish Sharma.

Surayanarayan is an associate professor in the mechanical engineering department of IIT-Bombay. He completed his PhD from the University of California, Berkeley, and worked in the US for six years. He returned to India in 2004 and joined IIT-Bombay.

His journey is similar to that of IIT-Madras professor Satyanarayanan Chakravarthy.

Chakravarthy is also a cofounder in at least six IIT Madras-incubated deep-tech startups, including ePlane, which is an electric plane startup aiming to make air travel easier, and space tech startups Agnikul Cosmos, which is gearing up to launch its first rocket. He is also involved in the development of two more startups.

Also Read: Inside IIT Madras: Meet the professor who is cofounder of 6 deep-tech startups

Sedemac makes critical components used to help generate power in automotive vehicles. The firm’s products are used in small engines, electric vehicles and e-bikes.

The firm employs more than 500 people and serves top OEMs in India, including Hero Motocorp, Mahindra and TVS. The firm has a development centre and two manufacturing plants in India.

In 2017, the firm raised around $7.5 million in funding from Infosys cofounder Nandan Nilekani as well as from existing investor Nexus Venture Partners and India Innovation Fund.

In 2018, Sedemac reportedly raised around $8 million from Iron Pillar.

The fundraise highlights the growing demand and opportunities in the country's manufacturing sector, buoyed by the government's push to Make in India through initiatives such as the Production-Linked Incentive scheme.

Investors are betting big on manufacturing and manufacturing tech enabling startups like Sedemac. In 2023, firms like Etheral Machines, Zetwerk, and Tamil Nadu-based Frigate raised funds across rounds.

Also Read: Bengaluru's Peenya industrial region is now a hotbed for manufacturing startups

“As the EV industry is growing investors will look to back startups that also offer components. The Centre is very focussed on making the EV industry completely self-sufficient and it is big bet for investors, you will witness more deals like Sedemac,” said an investor of a venture capital firm, requesting anonymity.

The funding comes at a time when the Indian startup ecosystem has been witnessing an uptick in early-stage and growth-stage deals.

In the last two weeks multiple startups held talks as well as raised funds. AstroTalk held talks with investors to raise nearly $30 million. SaaS firm SingleInterface raised $30 million and ShareChat $49 million.