Karkhana Acquires Micron EMS, Moves Into Electronics Manufacturing; Targets Rs 200 Crore ARR by FY27

India’s electronics manufacturing story is rapidly evolving. As global companies look beyond traditional supply chains and India emerges as a key manufacturing hub, a new generation of startups is stepping up to build deeper capabilities across the value chain. Bengaluru-based B2B manufacturing startup Karkhana is now making a decisive move in that direction.

In a strategic shift that signals its ambitions to move beyond platform-led aggregation, Karkhana has acquired electronics manufacturing services firm Micron EMS Tech Pvt Ltd. The deal marks the startup’s first step toward directly owning and operating manufacturing infrastructure — a move that could significantly strengthen its position in India’s growing electronics manufacturing ecosystem.

Karkhana Acquires Micron EMS to Strengthen Manufacturing Capabilities

Bengaluru-based B2B manufacturing startup Karkhana has acquired Micron EMS Tech Pvt Ltd, an electronics manufacturing services (EMS) company, in a deal valued at around Rs 10 crore, according to sources familiar with the matter. The acquisition has been structured as a mix of cash and equity.

The move represents a major milestone for Karkhana, which has largely operated as a manufacturing aggregator platform since its inception. By acquiring Micron EMS, the company is now stepping into direct shop-floor operations, allowing it to offer deeper and more integrated electronics manufacturing capabilities.

The acquisition brings with it a 40,000+ square foot manufacturing facility in Bengaluru, equipped with high-speed surface-mount technology (SMT) lines, through-hole PCB assembly systems, and more than 10 box-build production lines. With this infrastructure, Karkhana will now be able to bring critical manufacturing processes such as printed circuit board assembly (PCBA), advanced testing, and system-level manufacturing in-house.

For a company that has historically coordinated manufacturing through a network of partners, owning production infrastructure marks a strategic pivot.

Why Karkhana Is Moving Beyond the Aggregator Model

Founded in 2017 by Sonam Motwani and Karthik M.C., Karkhana started as a platform designed to solve one of India’s biggest manufacturing challenges — fragmented supply chains.

The company built a B2B platform that connects original equipment manufacturers (OEMs) with a network of contract manufacturers across India, helping businesses manage sourcing, engineering, prototyping, and production more efficiently.

However, as the complexity of products increased — especially in electronics-heavy sectors — the company realized that platform coordination alone would not be enough.

“For the last seven years we have largely operated as an aggregator connecting OEMs with manufacturing partners,” said Sonam Motwani, Founder and CEO of Karkhana.

“But as the complexity of products increased, we realised that to continue delivering excellence we also needed to start owning capacity, especially in electronics, which accounts for nearly 60–70 percent of the cost of most products,” she added.

Owning manufacturing capabilities allows Karkhana to gain greater control over quality, timelines, and engineering integration — key factors in high-value electronics manufacturing.

Micron EMS Brings Manufacturing Experience and Operational Depth

Micron EMS Tech brings over 15 years of manufacturing experience, including well-established shop-floor processes and operational systems. The integration of Micron’s production capabilities with Karkhana’s existing strengths in engineering, sourcing, and programme management is expected to create a more comprehensive end-to-end manufacturing offering.

Following the acquisition, the combined entity will operate with a team of more than 150 professionals across manufacturing, engineering, quality assurance, and operations.

This expanded capability positions Karkhana to support customers across the entire manufacturing lifecycle — from product engineering and component sourcing to final assembly and testing.

Strong Focus on EVs, Industrial Electronics and Connected Devices

Karkhana currently works with more than 25 original equipment manufacturers (OEMs) and generates the bulk of its revenue from three major sectors: automotive electronics, industrial electronics, and connected consumer devices.

Among these, automotive electronics — particularly electric mobility solutions — represent the largest share of the company’s business.

“Automotive electronics, especially electric mobility products like charging infrastructure, battery packs and motor controllers, contribute about 40–50 percent of our revenue,” Motwani said.

The company also works extensively with industrial electronics and premium connected consumer appliances, both of which are experiencing strong demand as hardware innovation accelerates globally.

Looking ahead, Karkhana plans to deepen its presence in these categories while expanding into adjacent sectors such as telematics, medical devices, and energy systems.

AI and Data Centres Are Opening New Opportunities

Another major opportunity emerging for electronics manufacturers is the rapid expansion of AI-driven data centre infrastructure.

As artificial intelligence workloads grow globally, demand for data centres — along with the power and energy systems that support them — is rising sharply. This shift is also driving demand for sophisticated electronic systems, many of which are now being manufactured in India.

“With AI growing rapidly, the demand for data centres and the energy systems that power them is increasing,” Motwani said.

“A lot of electronics used in those systems is now being manufactured in India, and that creates new opportunities for companies like us.”

Owning Manufacturing Boosts Global Credibility

For Karkhana, the acquisition also strengthens its credibility with international clients.

According to Karthik M.C., Co-founder and Chief Revenue Officer, companies that only operate as aggregators sometimes struggle to secure large manufacturing contracts.

“If you position yourself purely as an aggregator, customers often take you less seriously for large orders,” he said.

“Owning manufacturing gives legitimacy and acts as an anchor while we continue to leverage our supplier network.”

The company expects 60–70 percent of its production to take place in-house, while the remaining capacity will continue to be fulfilled through its broader network of manufacturing partners.

Targeting Rs 200 Crore ARR by FY27

With the Micron acquisition and expanded manufacturing capabilities, Karkhana is now setting its sights on aggressive growth.

The startup is targeting Rs 200 crore in annual recurring revenue (ARR) by FY27, nearly tripling its current scale. Growth is expected to come from a combination of new customer acquisitions, higher-value manufacturing contracts, and deeper participation in fast-growing electronics segments.

The company also plans to expand its export footprint, particularly in the United States and Europe, as global companies diversify supply chains under the widely discussed China+1 strategy.

The Long-Term Vision: From Manufacturing to Product IP

Beyond contract manufacturing, Karkhana’s ambitions stretch even further.

The startup ultimately aims to evolve into an original design manufacturer (ODM) — a company that not only manufactures products but also develops its own product designs and intellectual property.

“Our long-term vision is to build reference designs for certain product categories and start owning more of the product IP,” Motwani said.

“Manufacturing is the starting point, but the goal is to eventually add design, engineering and product development capabilities.”

If executed successfully, this shift could move Karkhana further up the value chain — from coordinating manufacturing to building full-stack hardware innovation capabilities.