Startup Deep Dive : Tonbo Imaging — inside the defence-optics maker whose export revenue collapsed 93% right before its IPO

In 2012, a Bengaluru company that could not get the Indian Army to look at its thermal sights sold fifteen of them to US Army special operators instead. It took an Indian delegation watching American troops train with that gear, at a joint exercise, to find out the technology was built forty minutes from Bengaluru airport.

That company, Tonbo Imaging, filed a draft prospectus for an IPO in December 2025, refiled it in August 2026 after SEBI approval, and now reports a fiscal year in which revenue fell 22.7% and profit fell 30.1%, even as it lists the same technology in more than two dozen countries. Both things are true, and the gap between them is the story.

Quick facts

What they do

Tonbo Imaging designs and manufactures electro-optic and infrared (EO/IR) sensing systems for defence and security customers: thermal weapon sights that clip onto a soldier’s rifle, hand-held multi-sensor binoculars that fuse heat and visible light into one image, seekers that guide anti-tank missiles, and fire-control systems that sit on armoured vehicles. Its buyers are militaries, paramilitary and law-enforcement agencies, and other defence original equipment manufacturers (OEMs) who integrate Tonbo’s cores into their own platforms, across roughly two dozen countries, with more than 28,000 field-deployed systems as of March 2026 (DRHP, via Sahyadri Startups).

The origin

Arvind Lakshmikumar spent five years in the United States after his engineering education, working through Carnegie Mellon, before he and his wife decided to move back to India in 2004. He joined Honeywell briefly, then went on to run technology and operations at the Indian arm of Sarnoff Corporation, a storied US imaging-research spin-off of RCA. In 2008, Lakshmikumar and his team completed a management buyout of that Indian unit and set it up as an independent company. They called it Tonbo, the Japanese word for dragonfly, an insect whose compound eyes process a wider field of vision than almost any other creature. The founding bet was narrow and specific: India’s own defence-optics needs were being met almost entirely by imported sights and sensors, and a small Bengaluru engineering team that had already built imaging systems for a US lab could build a proprietary, non-ITAR-restricted (International Traffic in Arms Regulations) alternative that could sell to India and to everyone India could not buy from.

The struggle years

The first setback was not a product failure; it was indifference. When Tonbo approached the Indian Army in its early years, officers were sceptical of a sight with no existing user base and no track record. Nobody wants to be the first customer for a weapon sight. The company had to look outward, and in 2012 it sold a small batch, reportedly around fifteen units, to US Army special operations units. It took a joint Indo-US military exercise for an Indian delegation to spot American soldiers training with a Bengaluru-built sight and to go looking for its makers themselves (FactorDaily; ThePrint).

A second, sharper crisis arrived roughly a decade later. By The Ken’s account, Tonbo’s revenue fell from about $6.5 million in 2020 to roughly $3 million in 2021 to 2022, even as the company was sitting on close to $24 million of orders it lacked the working capital to fulfil. Its existing venture backers, Edelweiss, Qualcomm Ventures and Artiman Ventures, were structured for early-stage bets, not the roughly $4 million in growth-stage working capital the company needed, and none stepped up. Lakshmikumar’s own description of the moment: “We were at an inflection point and needed more time to grow” (The Ken). A defence-hardware company can have a full order book and still come close to running out of runway to build the hardware.

• 2012: no Indian Army orders on record; breakthrough instead came via a US Army special-operations purchase of around 15 units (FactorDaily)
• 2020 to 2022: revenue reportedly fell from about $6.5 million to about $3 million, against roughly $24 million of unfulfilled orders (The Ken)
• 2021 to early 2023: existing investors could not supply the estimated $4 million in working capital needed to convert the order book into revenue (The Ken)

The turning point

The rescue came from an unlikely source: not a venture fund, but an outsourcing vendor. In February 2023, HBL Power Systems, the Hyderabad-listed batteries-and-electronics group that had been manufacturing for Tonbo, took a 34% stake for $18.3 million, valuing the company at $54.7 million (The Ken). The number on one side of that line is a company that had shrunk to roughly $3 million in annual revenue two years earlier and could not fund its own order book. The number on the other side is what came after: revenue of ₹428.19 crore in FY24 and ₹469.08 crore in FY25 (roughly $50 million at then-prevailing rates), a near-fourfold jump within two fiscal years of the HBL infusion, before the FY26 pullback (DRHP figures, via Inc42 and Groww). A strategic manufacturing partner, not a venture fund, supplied the capital that let a defence-hardware order book finally turn into shipped, billed product.

The money behind it

• June 2011, angel round: $500,000 from Mumbai Angels (Inc42)
• 2013, Series A: reportedly $6.4 million from Artiman Ventures (FactorDaily)
• September 2017, Series B: $17 million led by WRV Capital, with Qualcomm Ventures and Edelweiss Private Equity participating; described at the time as the largest private venture investment then made in an Indian defence-technology company (Entrackr; Business Standard/PTI)
• September 2022, debt financing: $8 million from BlackSoil (Inc42)
• February 2023, strategic round: $18.3 million from HBL Power Systems for a 34% stake, at a $54.7 million valuation (The Ken)
• April 2025, Series D (pre-IPO): ₹175 crore (about $20.4 million) from Florintree Advisors, Tenacity Ventures and the Export-Import Bank of India, reportedly valuing the company at ₹1,500 crore (YourStory; DealStreetAsia)

What each backer changed: Mumbai Angels and Artiman funded the original product bet before there was a paying government customer. WRV Capital’s Series B, in 2017, financed global expansion once export orders (including a $100 million, ten-year Peruvian Army contract signed in 2016 through US integrator Unified Weapon Systems) proved the technology travelled beyond India (TheTechPortal; Inc42). HBL Power Systems’ 2023 investment was existential working capital dressed as an equity stake, from the one party that already understood Tonbo’s manufacturing constraints because it built the hardware. The Series D, led by Florintree and joined by India’s Exim Bank, was explicitly structured as pre-IPO capital and a signal to the market ahead of the DRHP. Trackers disagree on lifetime funding: CB Insights puts total disclosed funding near $44 million, Inc42 near $80 million; summing only the named, dated rounds above gets to roughly $70 million, with the gap explained by undisclosed grant funding (Tonbo was a lead company in the government’s Defence India Startup Challenge and has drawn iDEX grants) and rounding across currencies.

How it makes money

Tonbo is a hardware OEM, not a services or subscription business: it earns almost entirely by manufacturing and selling physical sensing systems against government and defence-OEM contracts, then booking revenue as units and systems are delivered against purchase orders.

• Money in: unit sales of thermal sights, binoculars, imaging cores, missile seekers and fire-control systems, sold directly to militaries and law-enforcement agencies or through integrators such as Unified Weapon Systems (for the Peru order) and Bharat Dynamics Limited (for missile-seeker work in India)
• Costs out: cost of materials was ₹165.5 crore in FY26, the largest single line, against ₹215.3 crore in FY25 (DRHP, via Inc42); employee benefits rose to ₹49.6 crore in FY26 even as revenue fell, reflecting a roughly 90-strong, largely fixed, in-house engineering headcount
• Where the margin sits: EBITDA margin has moved from about 10.6% in FY23 to about 29.7% in FY25 as the company built scale on a fixed engineering base, before compressing in FY26 as revenue fell faster than costs could be cut (Groww, DRHP figures)
• The part people get wrong: a defence-hardware order book is not revenue. Tonbo’s 2021 to 2022 crisis happened with roughly $24 million of orders on the books; the constraint was working capital to buy components and manufacture against those orders, not demand
• Intellectual-property structure: the company states its core designs are fully owned and free of US ITAR restrictions, which it presents as what lets it export to markets a US- or Israeli-origin competitor could not reach without an export licence (company DRHP summary, via Sahyadri Startups)

The numbers

Figures in ₹ crore, from Tonbo’s DRHP disclosures as reported by Inc42 and Groww.

• FY23 revenue was ₹96.83 crore, meaning revenue nearly quadrupled in FY24 as the post-HBL order book converted to shipments (DRHP, via Groww)
• FY25 was the peak year on both revenue and profit to date: ₹469.08 crore revenue, ₹72.76 crore PAT (DRHP; Inc42)
• FY26 reversed both: revenue down 22.7% and PAT down 30.1%, a decline the company attributes largely to a collapse in export orders rather than domestic demand (Inc42)

Where the money comes from

The real surprise in Tonbo’s numbers is not the FY26 decline in isolation; it is how completely the revenue mix flipped in a single year.

• FY23: exports were about 18.7% of revenue, domestic sales the rest (DRHP, via Sahyadri Startups)
• FY24: exports rose to about 48.6% of revenue (DRHP)
• FY25: exports were the majority at 65.5% (₹307.34 crore of ₹469.08 crore), domestic 33.5% (₹157.04 crore) (DRHP)
• FY26: the mix inverted sharply. Export revenue collapsed 93.4% year-on-year to about ₹20.2 crore, while domestic revenue rose to about ₹337.4 crore, making India roughly 93% of a smaller overall pie (Inc42)

Read together, Tonbo went from an export-led company in FY25 to an almost entirely domestic one in FY26, and the swing in export revenue alone (roughly ₹287 crore lost) is larger than the entire year-on-year fall in total revenue (roughly ₹106 crore), meaning domestic orders were already partly offsetting an export order book that had gone quiet. The company has not, in public disclosures reviewed for this piece, given a single named reason for the export drop; potential contributors visible in the record include lumpy, multi-year contracts like the Peru order that do not repeat annually, and the timing of large one-off international deals landing in FY25 rather than FY26.

The risks

• Sourcing and IP allegations ahead of listing: Tonbo’s fresh DRHP disclosed complaints alleging it sources critical components from Chinese OEMs through a related entity, CEAQ Technologies Pte Ltd, and that some contracts were won at prices below the cost of raw materials, which critics say inflated order-book optics ahead of the IPO. Tonbo has denied the allegations in its filing (Inc42; via WebSearch of DRHP disclosures). This is a live, contested claim from a single primary filing and should be read as an allegation, not an established fact
• Revenue concentration and lumpiness: a defence OEM’s order book is built from large, infrequent, multi-year contracts (the ten-year, $100 million Peru deal is the clearest example). The FY25-to-FY26 swing shows how quickly that concentration can move both revenue and profit when one or two large export orders do not repeat
• An OFS-only IPO raises no fresh capital for the company: the entire listing, up to 1.81 crore shares, is an offer for sale by existing promoters and investors; the company itself receives no primary proceeds to fund growth, working capital, or the kind of gap that caused the 2021 to 2022 crisis (DRHP, via Groww and IndiaIPO.in)

The takeaway

Tonbo’s arc argues for a specific, transferable lesson about hardware startups selling to governments: a full order book is not the same as a fundable business, and the investor who understands your supply chain can matter more than the one who understands your market. Venture money got Tonbo’s technology built and proven abroad; it was a manufacturing partner, HBL Power Systems, that supplied the unglamorous working capital to turn a $24 million order book into shipped product. The company’s swing from 65% export revenue to 93% domestic revenue in a single year is a reminder that even a proven, non-ITAR, globally exported product can still be one or two large contracts away from a very different-looking income statement.

Frequently asked questions

What does Tonbo Imaging make?

Thermal weapon sights, multi-sensor imaging binoculars, missile seekers, and fire-control systems for militaries, paramilitary forces and defence OEMs, built on proprietary electro-optic and infrared sensing technology.

Who founded Tonbo Imaging, and when?

Arvind Kondangi Lakshmikumar, along with co-founders Ankit Kumar and Cecilia D’Souza, set up Tonbo Imaging in 2008 through a management buyout of Sarnoff Corporation’s India operations in Bengaluru.

Is Tonbo Imaging listed on the stock exchange?

Not yet as of September 2026. It filed a draft red herring prospectus (DRHP) with SEBI in December 2025, refiled it in August 2026, and received SEBI approval; the price band and listing date had not been announced at the time of writing.

How much has Tonbo Imaging raised, and at what valuation?

Named, dated rounds (angel, Series A, Series B, debt, HBL Power Systems’ strategic investment, and Series D) add up to roughly $70 million; funding trackers disagree on the lifetime total, ranging from about $44 million (CB Insights) to about $80 million (Inc42). Its April 2025 Series D reportedly valued the company at ₹1,500 crore, with press reports of the dollar-equivalent figure ranging from $175 million to $193.8 million.

Why did Tonbo Imaging’s revenue and profit fall in FY26?

Revenue fell 22.7% and profit after tax fell 30.1% year-on-year, driven mainly by a 93.4% collapse in export revenue (to about ₹20.2 crore from ₹307.3 crore in FY25), even as domestic revenue rose to about ₹337.4 crore, per DRHP disclosures reported by Inc42.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Inc42, “Tonbo Imaging Funding 2026 – Total Funding, Rounds & Investors” (accessed September 2026)
• Inc42, “IPO-Bound Tonbo Imaging’s Net Profit Sinks 30% YoY To ₹362.6 Cr In FY26” (2026)
• Inc42, “Tonbo Imaging Files DRHP For OFS-Only IPO” (December 2025)
• Inc42, “Bengaluru Based Design Startup Tonbo Imaging Inks $100 Mn Deal With Peruvian Army” (October 2016)
• Inc42, “Defence Startup Tonbo Imaging Gets $17 Mn Boost From WRV Capital, Others” (September 2017)
• Groww, “Tonbo Imaging India files DRHP with SEBI for an OFS-only IPO” (August 2026)
• Sahyadri Startups, “Tonbo Imaging IPO: Global Defence OEM Files DRHP With SEBI For Public Issue” (2026)
• MarcaMoney, “Qualcomm-backed Tonbo Imaging files DRHP with SEBI for IPO” (2026)
• IndiaIPO.in, “Tonbo Imaging India IPO Date, Price Band, GMP, Review & Details” (accessed September 2026)
• The Ken, “A rescue act: Defence startup Tonbo relies on its outsourcing vendor to be its defender” (2023)
• FactorDaily (archived), “Tonbo Imaging is helping the Indian army with its thermal imaging system”
• ThePrint, “Army taps Bengaluru-based firm for specialised sights in use with forces abroad”
• YourStory, “Tonbo Imaging raises Rs 175 Cr in Series D funding round” (April 2025)
• DealStreetAsia, “Tonbo Imaging raises $21m even as late stage deeptech funding dries up in India” (April 2025)
• PremierAlts, “Tonbo Imaging Private Stock Price & Valuation” (2026)
• Entrackr, “Defence tech startup Tonbo Imaging raises $17 Mn in Series B round” (September 2017)
• Business Standard/PTI, “Tonbo Imaging raises USD 17 mn in Series B funding” (September 2017)
• TheTechPortal, “Tonbo Imaging grabs a $100Mn defence contract with Peruvian Army” (October 2016)
• CB Insights, Tonbo Imaging financials profile (accessed September 2026)
• Trading Economics, USD/INR exchange rate (18 September 2026)

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