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Monday, August 02, 2021

Interview with Saankhya Labs founder and CEO: ‘Difficult to raise capital in foreign markets being an Indian tech company’

The company’s founder and chief executive officer Parag Naik tells The Indian Express it is difficult to raise money in the technology sector.

Written by Aashish Aryan |
Updated: July 19, 2021 5:49:41 pm
While manufacturing is important, R&D-led manufacturing is far more important. (Unsplash/ Representational)

Bengaluru-based Saankhya Labs, which built the world’s first production Software Defined Radios (SDR) chipset, says it is the country’s first fabless semiconductor solutions company. The company’s founder and chief executive officer Parag Naik tells The Indian Express it is difficult to raise money in the technology sector.

Every country now wants to focus on its homegrown technology. How does Saankhya Labs, then, position itself — coming from a market that has increasingly looked to focus just on domestic companies rather than opening itself up to more firms from across the world?

Indian companies — in international markets that we have been looking at — form a very neutral perspective. We do not have any issues with our international operations — about us being Indian origin except it is far more difficult to raise capital being an Indian technology company. It may sound ironical, with all other people raising billions of dollars. It is tough to raise money for a really high-tech company. Other than that I do not see any issues of being a domestic Indian company. Being in India and deploying in it gives us the scale that very few companies can get.

There has been a call for Aatmanirbhar Bharat, which envisions manufacturing of maybe chipset or even other equipment and technologies used in the mobile networks in India. Did the call for these things trigger the need for building all these products in haste, even when we might not have been ready to make these? Or is it the right time?

You cannot build 5G products overnight. We have been around for 12-13 years. But this talk is helping. It is acting like a catalyst.

Should there be more focus on Research and Development investment in India? The Ministry of Electronics and Information Technology and the Department of Telecommunications want PLI schemes to focus on building the product or expanding the supply chains that companies already have, rather than investing in R&D.

While manufacturing is important, R&D-led manufacturing is far more important. If I own the patent and the product, I can manufacture anywhere. Setting up a factory is a no-brainer. The government and bureaucrats know only about land and power and depreciation around it. The big companies like Samsung, Ericsson, Nokia are nomadic companies. They keep moving to the next green pasture. Because you are giving them rebate, they will come here. Tomorrow somebody else gives them the rebate, they will move out from here. We will be left high and dry.

There were reports about the cancellation of experimental 5G spectrum allocated to Saankhya Labs. Would you like to clarify on what happened there?

We have been granted the 5G broadcast experimental license by DoT. The Secretary DoT himself intervened and brought all the stakeholders together to clear the air and thereof issue the license.

There have been Parliamentary panel reports that we have missed the 2G, 3G and also the 4G bus. And, if we continue the way we have been, we could miss the 5G bus also. What are your views on the future of 5G in India?

We cannot predict whether we will be successful or not. For now, I would say we are reasonably successful. We are not yet a commercial blockbuster. How we play our strategies or how some of the geopolitics plays out will determine this.

This requires serious amount of capital. Even a food-delivery startup requires $500 million investment these days. We are building 5G in less than one-tenth of that cost. It is difficult to predict, but I am an optimist. We have deep expertise. All I can say is that we have got a very good shot. We are building a good indigenous 5G system. Only time will tell if we will be successful or not.

As a company and as part of the ecosystem, what would be the ideal roadmap for 5G or, for once, leading the charge with 6G and beyond?

There is this sign on Indian roads that fits here: start early and arrive early. If you start late and then drive fast to reach, you may meet with an accident.

All these are usually 5-10 year plans. So, you have to look at 10 years, invest in these, and be patient. They are all business models. What we are doing is very strategic for the country and this has to be recognised and supported. This has to be a bipartisan 10-year approach, irrespective of who is in power and who is out of it. This has to be nurtured. It has to be treated like the space programme and atomic energy. We have done that in the past. We can do it in 5G as well.

It cannot be completely government-driven stuff because those days are gone now. The way to do it is probably support, as I said, through incubated markets, risk capital, giving businesses to companies such as ours. That is how Huawei was built.

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