BANGALORE: When US-based ThoughtFocus Technologies quietly bought aircraft component software maker Rayon Technologies last month, it highlighted the growing opportunity for Indian startups to make a mark in the lucrative avionics sector.
Cofounded in 2010 by Yogeeshachar BK, a former employee of AK Aerotek Software, the company had just three global customers but was highly profitable
Cofounded in 2010 by Yogeeshachar BK, a former employee of AK Aerotek Software, the company had just three global customers but was highly profitable
While the low number of clients indicates the difficulty startups have in breaking into the sector, it also shows business from them is much higher.
The fact that the deal was not reported in the media tells the story of the avionics space in India — a lot of action but very little talk.
Avionics, derived from a mish-mash of the words "aviation" and "electronics" , refers to any of the electronic systems inside an aircraft. The sector is becoming attractive as several multinationals outsource their work to India.
"We had offers from other companies as well. It is a very small community," said 38-year-old Yogeeshachar, who also worked at BEL. "ThoughtFocus knew about us and made the best offer ." Rayon and ThoughtFocus declined to reveal financial details. "India was the top place where we could find talent," said ThoughtFocus' cofounder Shylesh Krishnan, 43.
Ten-year-old ThoughtFocus, funded by BlackStone private equity group, designs obstacledetection systems for helicopters and aircraft, including for Boeing and Airbus.
"The biggest advantage we (India) have is a strong software backbone in terms of design and testing of avionics equipment and comparatively lower cost of labour," said John Siddharth, a senior aerospace and defence analyst at research firm Marketsandmarkets , which estimated the size of the Indian market at $150 million (Rs 884 crore).
Setting up in avionics is not easy. It takes at least a year to develop a product and a few more to test it on systems that cost about $1-2 million (Rs 5-10 crore). Then there are several certifications that serve as obstacles to enter this capital intensive industry. Undeterred, young Indian entrepreneurs are lured by the vast opportunity and market.
Some are getting into it by working on projects that are related to avionics, establishing their reliability and then bidding for bigger deals. Kani Selvan, 24, who completed a project at Defence Research and Development Organisation after graduation, cofounded Aviotrix last year to train professionals draft aircraft manuals, which is used by pilots and flight crew.
The entrepreneur convinced 40-year-old Khazafi Khan, who owns software company i-Fact Technologies, to work with him, and has since then trained about 7-10 people every month for 30 days.
"Training is a good way for me to begin, build contacts with both students and industry," said Selvan , who studied aeronautical engineering at Dhanalakshmi Srinivasan College of Engineering in Coimbatore.
These efforts are bearing fruit. The company is in talks with a leading aerospace major to help them draft their manuals. The self-funded company, which plans to get into project development in the sector, is looking at Rs 40 lakh in revenue this year.
The fact that the deal was not reported in the media tells the story of the avionics space in India — a lot of action but very little talk.
Avionics, derived from a mish-mash of the words "aviation" and "electronics" , refers to any of the electronic systems inside an aircraft. The sector is becoming attractive as several multinationals outsource their work to India.
"We had offers from other companies as well. It is a very small community," said 38-year-old Yogeeshachar, who also worked at BEL. "ThoughtFocus knew about us and made the best offer ." Rayon and ThoughtFocus declined to reveal financial details. "India was the top place where we could find talent," said ThoughtFocus' cofounder Shylesh Krishnan, 43.
Ten-year-old ThoughtFocus, funded by BlackStone private equity group, designs obstacledetection systems for helicopters and aircraft, including for Boeing and Airbus.
"The biggest advantage we (India) have is a strong software backbone in terms of design and testing of avionics equipment and comparatively lower cost of labour," said John Siddharth, a senior aerospace and defence analyst at research firm Marketsandmarkets , which estimated the size of the Indian market at $150 million (Rs 884 crore).
Setting up in avionics is not easy. It takes at least a year to develop a product and a few more to test it on systems that cost about $1-2 million (Rs 5-10 crore). Then there are several certifications that serve as obstacles to enter this capital intensive industry. Undeterred, young Indian entrepreneurs are lured by the vast opportunity and market.
Some are getting into it by working on projects that are related to avionics, establishing their reliability and then bidding for bigger deals. Kani Selvan, 24, who completed a project at Defence Research and Development Organisation after graduation, cofounded Aviotrix last year to train professionals draft aircraft manuals, which is used by pilots and flight crew.
The entrepreneur convinced 40-year-old Khazafi Khan, who owns software company i-Fact Technologies, to work with him, and has since then trained about 7-10 people every month for 30 days.
"Training is a good way for me to begin, build contacts with both students and industry," said Selvan , who studied aeronautical engineering at Dhanalakshmi Srinivasan College of Engineering in Coimbatore.
These efforts are bearing fruit. The company is in talks with a leading aerospace major to help them draft their manuals. The self-funded company, which plans to get into project development in the sector, is looking at Rs 40 lakh in revenue this year.
Larger companies, such as Wipro Infrastructure Engineering, Titan Precision Engineering and HCL, entering the fray, spurred by the low costs and increased demand.
"Aerospace is a key business unit within HCL. Along with the talent we have some local ecosystems developed by both private and public institutes to develop avionics grade systems," said GH Rao, president of engineering and R&D Services at HCL Technologies.
Another new entrant Edall Systems, which was originally in the domain of unmanned aerial vehicles, is also slowly expanding to other areas.
"We are in talks with a few companies in Mumbai," said Alvin Anthony, 29-year-old cofounder of the company, which expects to more than triple its topline Rs 1.5 crore this year.
To make the space more accessible, Davalsab Ladammanavar, 24, set up the Aerospace Science Research Foundation in 2011, to enable students and entrepreneurs connect with the who's who of the industry. "I will start my own venture in avionics in a few years," said Ladammanavar. "Once I have a better understanding of the system."
Another new entrant Edall Systems, which was originally in the domain of unmanned aerial vehicles, is also slowly expanding to other areas.
"We are in talks with a few companies in Mumbai," said Alvin Anthony, 29-year-old cofounder of the company, which expects to more than triple its topline Rs 1.5 crore this year.
To make the space more accessible, Davalsab Ladammanavar, 24, set up the Aerospace Science Research Foundation in 2011, to enable students and entrepreneurs connect with the who's who of the industry. "I will start my own venture in avionics in a few years," said Ladammanavar. "Once I have a better understanding of the system."
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