DGB Microsystems, a Bangalore-based mobile device design and manufacturing company, has secured $8.5 million in strategic financing from SIDBI Venture Capital Ltd (SVCL), and Clearstone Venture, a California-based early stage VC fund.

The privately held Indian company, set up about three years ago, designs and manufactures mobile handset solutions. It aims to emerge as the first Indian company to indigenously manufacture mobile handsets.

DGB has a design centre in South Korea and offices in the US and China. It has handset R&D units in Bangalore and Chennai, and focusses on designing GSM, CDMA and WCDMA handsets. Its procurement and compliance centres in China work closely with global manufacturers and component suppliers.

According to Suresh Dholakia, CEO, and president, DGB, its handsets will be feature-rich and high quality, but will be marketed at competitive prices, customised for its target markets. Dholakia has been involved in setting up several start-up tech firms in the US, including Real-Chip Inc, Silicon Automation Systems (now known as Sasken), Frontline Design Automation, and AccelWork Inc, some of which he sold for tens of
millions of dollars.

DGB will cater to target markets with 'value for money' product solutions, starting from entry-level basic mono GSM and CDMA phones to advanced 3G handsets that are localised and specifically customised for regional requirements.

"DGB is strategically focused on understanding the operator's handset requirements and collaborate closely in providing value for money handsets solutions with a specific thrust on rural and new markets," says Vijay Balakrishnan, vice-president, marketing.

For Clearstone, the US-based VCF, which has funded firms like Pay Pal and Overture, this is its second investment in India. "This demonstrates our commitment to companies that service the domestic market with products that are globally competitive in terms of quality and locally relevant in terms of price and performance," says Rahul Khanna, director, Clearstone Venture Advisors.

Adds Sumant Mandal, managing director, Clearstone Ventures Partners: "We are confident that DGB will make India a key player in the mobile handsets solutions business. Clearstone's endeavour is to promote businesses such as DGB, that are poised to take India into category leadership positions in the world."