CREO is a new startup in India with big ambitions. It not only wants to create a new Android-based operating system, but also produce its own smartphones. The Bengaluru-based company announced today that it has raised $3 million from Sequoia India, Beenext Ventures, and India Quotient.

Sequoia India and India Quotient also backed Mango Man, the CREO founding team’s previous startup, which raised $1.75 million last year. Its flagship product is an HDMI dongle called Teewe that set itself apart from competitors like Google Chromecast with features tailored for the Indian market. For example, Teewee was engineered to automatically detect and organize media already downloaded on users’ PC, tablets, and smartphones, since Internet connections in India are often too unstable to support streaming content. Teewe 2, the dongle’s second version, has sold 50,000 units since launching in May 2015.

Like Teewe, CREO’s operating system and smartphones, which launches later this year, will be created with the Indian market in mind. Co-founder and chief executive officer Sai Srinivas claims CREO’s operating system will be more than just another Android skin because it will “deliver features unheard of on any device.” He said it is too early to give specific details, but the OS will be updated every month with features and improvements based on customer requests.

Producing its own hardware means CREO will have to compete with Xiaomi, Micromax, OnePlus, Samsung, and other manufacturers that are aggressively wooing consumers in India, which IDC expects to be the world’s second-largest smartphone market (after the U.S.) by 2017. These companies all make affordable smartphones (some priced less than $100) and some have even opened their own factories in India. Selling its own smartphones is a costly and potentially risky move, but it also allows CREO to build its own ecosystem and ensure that its users can download the latest updates for its operating system.