Motor control solutions company Virtual Forest seeks partners, Energy News, ET EnergyWorld

Q&A with Omer Basith, CEO, Virtual Forest

Virtual Forest, producer of energy-efficient motor controllers, expects to reach a gross manufacturing value of $25 million by the end of 2022. It is working with companies like IFB Appliances, Crompton and Luminous to make electronics more efficient, Omer Basith, co-founder and CEO tells ETEnergyworld in an exclusive interview. Edited excerpts.

AAs a startup, what is Virtual Forest’s business model and how does it plan to develop?
We manufacture motor control solutions for the journey to net zero. We want to work on technologies that will lead to emission reductions. The area of ​​specialization we have identified is motor control. Motors are responsible for more than 65% of domestic energy consumption, a significant portion of industrial energy consumption, more than 50%. The current technology in place on induction motors is extremely inefficient. Over the past 15-20 years, new designs have appeared – permanent magnet motors, permanent magnet synchronous motors (PMSM), etc. They are 20% more efficient than existing models.

We have identified three technological pathways to decarbonization. The first path is the energy efficiency of household appliances. We started working in air conditioning, which is a big consumer of motor control electronics in India. We started both by replacing Chinese imports and by creating cost-effective solutions. We’ve been in mass manufacturing for three quarters now.

The second way is to supply large volumes of brushless DC motor (BLDC) ceiling fans. This has been a new and unique opportunity as far as India is concerned due to the way the fan market is set up and the requirements for ceiling fans in India. The government has made star ratings for ceiling fans mandatory from December 31, 2022. This notification came into effect on July 1. Industry must liquidate all existing stock of unclassified ventilators on the market. This represents a sea of ​​change when it comes to technology, as anything above a one-star fan will require a BLDC motor. This means that we are going to see a huge increase in the volume of demand for bldc ceiling fans. About 6% of India’s total energy consumption comes from residential ceiling fans. A BLDC ceiling fan consumes by default less than 50% of the energy than a regular fan. In the future, we are about to start working on manufacturing solutions for inverters for washing machines, solar pumps, as well as other small applications, like exhaust fans, etc.

The third way we are working on is electric mobility. We have recently worked with several motor manufacturers and 2 EV manufacturers to develop Indian made motor controllers for this particular application. We now have customer validated solutions with some of the major engine manufacturers in India. We will also go into production for these solutions.

What is the gross manufacturing value of Virtual Forest?

Our gross manufacturing value (GMV) was $4.5 million in the fourth quarter of last year. This year, we crossed 10 million dollars, which is really a significant volume for a startup like us. We hope to increase this amount to $25 million by the end of the year. Our goal is that by 2025-2026 we achieve nearly $400 million in GMV, or 400 million electronic devices manufactured using our designs. We do not actually manufacture the products. We have partnered with a few major electronics manufacturing service (EMS) companies. We buy from a contract manufacturer and sell to our end customers. We also have a licensing model where we license our designs to EMS companies who then sell them directly to end customers.

What was the funding requirement and do you have any plans for future investments?

We had a round of funding in November 2019 and another in July 2020 where one of our major manufacturing partners invested in us. We have had cash flow, but we are currently in a period of absolute growth and are looking to expand our infrastructure, lab and workforce. We are also looking for new partners.

You talked about profitability being key to this business. How do you handle this?

Any business in India’s business ecosystem must pass the price barrier. Unless you have a cost advantage over their current solution, no one will be interested. We offer technological solutions that potentially reduce the cost. We maximize the volume discounts that we could obtain for our products. We’ve been quite strategic with our component sourcing, which has helped us achieve low cost. If you promise a supplier very high volumes, you get lower costs. Unfortunately, this is not the case for individual Indian companies who still manufacture at very low volumes compared to Chinese competitors. We have been able to aggregate demand from several different customers and source raw materials at an aggregated price because we have large volumes.

What are some of the companies you currently work with and plan to work with in the future?

We work with some of India’s largest OEMs in the field of consumer appliances. We work with devices like IFB devices for air conditioning and washing machines. We work with Crompton and Luminous and have recently produced a small quantity for Bajaj as well. We have just started doing business with them in the ceiling fan space. In airspace, we also work with major ACON manufacturers, such as Voltas. At the moment, we are focusing on the domestic market. Our goal now is to start serving opportunities in Southeast Asia.