Why This VC Firm Signed a $6 Million Cheque to Replace Chinese Silicon

When the IAN Group wanted to make its first investment in a fabless semiconductor startup, the venture capital firm knew that the pool wasn’t that big.

"In India, semiconductors are not at all common. There are only a few semiconductor startups which are investable, and very few overall," says Padmaja Ruparel, Co-founder of the IAN Group, and Senior Managing Partner of the IAN Alpha Fund.

That’s why, when Bengaluru-based system-on-chip design startup BigEndian Semiconductors pitched to the IAN Group, the VC firm knew it had to manage its own expectations. In fact, the two-year-old startup was not even selling a polished vision of total indigenous production. But that candour was what made the pitch credible.

"It was an indigenous product, but they were still a little reliant on overseas components," Ruparel tells AIM. "The fact that they said that as they go on and progress, they will try and indigenise 100%, I think that's a big aspiration, which drove us to even further sort of fructify our decision."

Earlier, in May, BigEndian Semiconductors bagged $6 million in a round led by IAN Alpha Fund, the IAN Group’s second venture capital fund focused on early-stage startups in deeptech and frontier sectors. It also saw participation from Vertex Ventures SEA, IvyCap Ventures, and several angel investors.

With the capital, the startup will fund chip design, expansion, and the critical tapeout phase—the final stage of the design process for integrated circuits before they are sent for manufacturing. BigEndian is also establishing partnerships with Taiwan to bridge the design-manufacturing gap in the global supply chain.

IAN Fund's investment in BigEndian is not merely a cheque written on a compelling pitch. It is, in Ruparel's telling, a wager on national strategic destiny.

Behind the Pitch

The macro case is straightforward: a fund focused on national strategic imperatives would inevitably find itself looking at a company whose core purpose is to reduce India's reliance on Chinese hardware. But the micro matters just as much. 

IAN's evaluation of semiconductor startups runs more exacting than its approach to software plays. 

"The hardware piece, the supply chain, their ability to assemble in time, their ability to price it right, their adoption—how are they going to get it adopted? From a perspective of go-to-market (GTM) strategy, those become very important," she says. 

Enterprise validation was central to the investment thesis. "I don't think it's investable if there's no validation. Ultimately, there will be somebody who will buy it." 

On capital efficiency, Ruparel is characteristically terse. She views cost discipline as especially critical given elevated global cost pressures stemming from geopolitical tensions in West Asia.

But experience and diligence ran deep in BigEndian’s pitch, as IAN drew on its two-decade network of domain experts. "There is deep diligence on their technologies, on their understanding, on their track record. You won't have a fresher doing a semiconductor. Let's put it like that," she adds.

Patient Capital and the Long Gestation Problem

The bet in a semiconductor startup is fundamentally a technology and IP bet, not just a scale bet. "Value creation is dependent on the core technology and the IP defensibility. Those are the pieces." Early-stage capital in deeptech has grown 91% year-on-year in Q1 2026, she cited, but late-stage capital remains thin. 

On pivots, she is direct. "You can't swivel a semiconductor to say now you become a drone company." Business models can evolve as new GTMs emerge, industrial and manufacturing customers adopting embedded technology, for instance, but the core IP has to stay the course. 

IAN has also structured its Alpha fund to retain a percentage of its capital for follow-on investments, staying in portfolio companies as they move into later rounds. "It can harvest better returns, because otherwise your money is taking only the very early risks, and when it really starts creating value, you've not got money, or you've exited," Ruparel notes.

What genuinely excites her is the intersection of AI and hardware. "AI embedded into robotics makes a lot of sense, because then you are at the cusp of AI and deeptech," She notes that advanced hardware, spacetech, drones, and industrial systems are where AI is actually being embedded at scale, and the shift she observes between 2025 and 2026 is from piloting to production. 

That’s where BigEndian comes in. The startup has a vision of building indigenous SoCs for surveillance cameras, backed by strides in AI and image sensing. 

The Ecosystem Shift 

Five years ago, India's hardware story was limited to importing critical components and putting them together domestically. However, Ruparel believes that "the big swivel has happened, there is building of technologies here, within the country." 

There’s certainly been a great push. India’s first domestically-produced chip, the Vikram 32-bit processor, was developed by ISRO’s Semiconductor Laboratory last year. The space body also developed the IRIS microprocessor, developed as part of the SHAKTI processor family initiated by IIT Madras.

Moreover, under the India Semiconductor Mission, multiple fabrication units are underway in Gujarat and Odisha, with approved investments exceeding ₹1.60 lakh crore. 

It’s the trajectory that matters. "It's usually the zero-to-ten game that is the toughest. Ten to a hundred is an easier game," Ruparel shares. She expects India to be a semiconductor exporter eventually, drawing on the capital efficiency that has historically been the country's engineering signature.

Ruparel describes the Research, Development and Innovation (RDI) scheme as a strong signal of confidence in India’s emerging semiconductor ecosystem, with initiatives such as RDI and the Fund of Funds 2.0 helping accelerate growth. 

However, according to a report by Angel One, India still imports over $116 billion worth of electronics annually, while exports remain below $50 billion. Despite this growth, the country still runs a massive electronics trade deficit.

According to the Press Information Bureau, India’s semiconductor market is projected to cross $100–110 billion by 2030, but domestic manufacturing capacity and supply-chain depth remain limited compared to global competitors.

Money, Mentoring and Market Access

IAN's differentiation lies not just in capital but in what Ruparel calls the Triple M: money, mentoring, and market access. "Our thesis for the 20 years has been the Triple M. If we think we are going to invest in a startup and not do anything except for quarterly updates, then we'll probably not invest."

This philosophy emerged from early experience with first-generation founders who had technical depth but lacked commercial awareness. "These were very nascent founders. Unless we sort of mentored them, showed them some sides of the game, that became a factor in us succeeding with a lot of returns," she notes. 

Helping founders navigate team-building, stakeholder management, and translating technology into business remains central to IAN's value proposition, alongside the brand and the network itself.

BigEndian, in IAN’s case, reflects a broader attempt to build strategic technological capacity from within India, where patient capital, execution discipline, and ecosystem depth will ultimately determine whether the country can transition from assembly-led growth to genuine semiconductor leadership.