Indian smartphone maker Lava set to raise $100 million
Pitched to be one of the biggest domestic smartphone manufacturers in India, Lava International is reportedly raising investments of $100 million from chip makers. Three chip makers are set to invest in Lava, enabling the three companies to pick up stake in the company. With Apple and Samsung making their own chips, chip makers are turning to smaller companies from emerging markets for business.
Lava International is an Indian tech company manufacturing mobile handsets, smartphones and tablets. Headquartered in Noida, the company started out in 2003 as Pacetel Communications before being re-branded as Lava International in 2009. The company was the first to bring to India smartphones powered by Intel, and later ventured into manufacturing smartphones under the Windows OS. Lava garnered revenues of $2.1 billion this year.
Last month, Lava trumped other homegrown brands such as Micromax and Intex to become India's biggest domestic brands in terms of volumes. Reports stated that the company had shipped a whopping 7.1 million mobile handsets during the last quarter, compared with Micromax's volumes of 6.1 million and Intex's 6.96 million. Lava's market share also climbed to touch 9.5% from 9.1% during the last quarter.
"We have term sheets and everything going on; we are in advanced stages of talks. Whatever investments are coming into the company, we will put that in design and research and development (R&D)," Hari Om Rai, chairman of Lava International, told last month.
Reports stated that Lava's senior executives were not able to approach the market to raise investments earlier due to weak market conditions and increasing competition. The company said its new strategy for gaining investments should see more companies come on board over the next few quarters, to help boost its display and memory segments. Lava is also looking to invest Rs.2,600 crore across units.
"We have plans to increase our manufacturing facilities' overall capacity to 216 million units per annum in the next 5 to 8 years, which will entail an investment of Rs. 2,615 crore, of which Rs.500 crore will be invested over the next two years."- Lava
