Sandeep Tandon, the founder of online financial services player Freecharge, has allocated Rs 100 crore from his family office to invest in early-stage companies in the hardware, manufacturing, and Internet of Things (IoT) space. The investment arm will cut average check sizes of between Rs 2 crore and Rs 6 crore, Tandon told ET in an exclusive interview. The Rs 100-crore allocation will be managed by Tandon’s venture capital arm, Whiteboard Capital, and will be supplemented by dedicated team members with prior experience in manufacturing technology. Tandon’s family office has over four decades of experience in the manufacturing space, due to its ownership in Syrma Technology, an electronics component business.
“In our view, this is the time when India needs to build its dominance in hardware/manufacturing over the next decade or so, which would be the most crucial growth lever for the country,” Tandon told ET. Following the investment, Syrma will dedicate a prototyping line for portfolio companies to test prototypes. Once successful, these businesses will be eligible for manufacturing support at Syrma’s facilities.
“Founders in the manufacturing space typically don’t have access and enough on-ground experience with the pain points of manufacturers and aren’t always sure about how to trigger those solutions in real-world situations,” said Anshu Prasher, Partner, Whiteboard Capital. Whiteboard will work closely with the portfolio companies to share its expertise in manufacturing and provide working capital support.
“Unlike software, hardware solutions can’t be iterative once deployed, which is why getting the basics right before deploying it with any customer is essential to success. This is where we could potentially come in with our experience across both sides to help them get to the product-market fit sooner than otherwise,” Tandon said. Once a product-market fit is achieved, these early-stage entrepreneurs will be connected to Syrma’s existing base of clients in Europe and the United States. Additionally, the fund-raising experience of the team would also be made available to the founders, Tandon told ET.
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