Jeh Aerospace Secures $11M Funding for India Aircraft Supply Chain

Addressing Supply Chain Challenges in Aerospace Manufacturing

The founders of Indian startup Jeh Aerospace, Vishal Sanghavi and Venkatesh Mudragalla, have directly observed the increasing production constraints within the commercial aircraft industry.

Both Sanghavi and Mudragalla previously held positions at the Tata Group for nearly two decades.

During their time at Tata, they collaborated on projects involving major global aerospace companies like Boeing, Sikorsky, and Lockheed Martin.

Scaling Production with New Funding

Now, Jeh Aerospace is leveraging $11 million in Series A funding to alleviate global supply chain bottlenecks.

The company focuses on increasing the output of metallic components used in aero engines and aerostructures.

These components are then supplied to Tier 1 vendors in the U.S. who, in turn, provide parts to commercial aircraft manufacturers such as Airbus and Boeing.

A key objective is to establish India as a prominent hub for aerospace component manufacturing.

“While at Tatas, we demonstrated India’s capabilities to major OEMs – Boeing, Airbus, Sikorsky, and GE,” explained Sanghavi, who also serves as CEO of Jeh Aerospace. “Our aim with Jeh Aerospace is to unlock India’s potential for the Tier 1 and Tier 2 manufacturers within the supply chain.”

Innovative Manufacturing Approach

Jeh Aerospace maintains its headquarters in Atlanta to facilitate access to its U.S. customer base.

Its 60,000-square-foot manufacturing facility, located in Hyderabad, India, utilizes software-based, precision manufacturing techniques.

The 3-year-old company integrates precision machinery, robotics, and IoT devices to significantly reduce product introduction lead times.

Traditionally, this process took 15 weeks; Jeh Aerospace has streamlined it to just 15 days.

Sanghavi stated that their software-defined manufacturing process ensures predictable and dynamic scheduling, allowing for a consistent supply of high-quality components.

Investment and Future Growth

The Series A funding round was spearheaded by Elevation Capital, with General Catalyst also participating.

To date, Jeh Aerospace has secured approximately $15 million in funding from institutional venture capital firms.

This new capital arrives shortly after an undisclosed strategic investment from IndiGo Ventures, the corporate venture capital arm of IndiGo, an Indian airline.

Ashray Iyengar, a principal at Elevation Capital, highlighted the company’s “truly differentiated approach to aerospace manufacturing.”

The company’s innovative methods are attracting significant interest from both venture capitalists and strategic investors.

Challenges in Aircraft Production

According to data released by the International Air Transport Association earlier in 2024, global air traffic demand experienced a year-over-year increase of 10.4%. This growth surpasses 2019 levels by 3.8%.

This resurgence in demand is prompting airlines to expand their fleets, leading to increased orders. Simultaneously, the industry is navigating challenges related to workforce availability and production bottlenecks, as highlighted in a recent Deloitte report.

Tier 1 suppliers are currently experiencing prolonged lead times due to a record-high commercial aircraft backlog, which currently stands at nearly 15,700 units, as reported by McKinsey.

Jeh Aerospace's Approach

The founders of Jeh Aerospace posit that leveraging technology to enhance the production scale of metallic components for both aero engines and aerostructures can alleviate this existing bottleneck. This core belief has guided the development of their 100-person team, advisory network, and overall business strategy.

Sanghavi, formerly the chief operating officer at Tata Boeing Aerospace, and Mudragalla intentionally chose to focus on Tier 1 and Tier 2 manufacturers rather than directly engaging with OEMs like Airbus and Boeing. This decision stems from the fact that these tiers account for 60% to 70% of aircraft manufacturing, while OEMs themselves comprise only 30%.

Customer Focus and Growth

Currently, Jeh Aerospace serves a select group of six paying customers, including GS Precision, based in Vermont, and RH Aero, headquartered in Ohio. Sanghavi emphasizes that these clients represent “high dollar, high ARR customers” with significant potential for expansion over the next one to two years.

The company prioritizes cultivating deep, meaningful relationships with a smaller number of clients, rather than pursuing a large volume of transactional interactions. Scaling rapidly with a focused customer base is considered more efficient.

“We believe in working with fewer, but superior customers,” Sanghavi stated. “The business model doesn’t necessitate a large customer base, as substantial scaling can be achieved with a limited number of key accounts.”

Advisory and Financial Progress

Jeh Aerospace has assembled a strong advisory team with extensive experience in the commercial aircraft industry. This includes Pratyush (Prat) Kumar, former president of Boeing India, and Dwaraka Srinivasan, former CEO and managing director of Airbus India, both of whom are early advisors and investors.

Since securing a $2.75 million seed round in January of the previous year, Jeh Aerospace has successfully delivered over 100,000 flight-critical components and tools on schedule.

The startup has also established a manufacturing capacity exceeding 250,000 hours per year.

In the last fiscal year, the company achieved $6 million in annualized recurring revenue (ARR) and attained profitability. Projections indicate a 3x to 4x increase in ARR this year, supported by a current order book valued at $100 million.

Future Plans and Market Position

The newly acquired $11 million in capital will be allocated to expanding manufacturing and inspection capabilities through investments in advanced digital production technologies, according to Sanghavi.

The co-founders of Jeh Aerospace envision an opportunity to bolster local manufacturing within India and strengthen the nation’s standing in the global aerospace sector, mirroring its recent success as a production hub for iPhones.

India is increasingly significant in aerospace manufacturing, with Airbus currently sourcing $1.4 billion in components annually and aiming for $2 billion by 2030. Boeing intends to spend $1.3 billion annually and is investing $200 million in a new engineering and technology center in Bengaluru, established in 2023.

However, the South Asian nation has yet to achieve widespread success in aerospace component manufacturing, a gap that Jeh Aerospace aims to address.

Competitive Landscape

While few Indian startups specialize in aerospace component manufacturing, JJG Aero appears to be a comparable entity to Jeh Aerospace based on its industry positioning. Sanghavi refrained from commenting specifically on JJG Aero, noting that his startup primarily views U.S.-based Tier 2 suppliers as its main competitors.