Inventus Capital moves away from tradition, bets on hardware startups

Technology-focused venture capital (VC) fund Inventus Capital Partners, which earlier invested in software-based companies, is now exploring hardware start-ups. The Silicon Valley- and Bengaluru-based early-stage fund has placed bets on BluArmor, which manufactures tech-laden smart motorcycle helmets.

Inventus, along with venture fund Kitven, had led a $1.4-million Series A round in the start-up last month.

“Traditionally, we used to invest predominantly in internet-based companies and stayed away from hardware as India did not have the strength in the segment. Also hardware could be copied by Chinese start-ups as they had stronger manufacturing capabilities. So, most of the VCs stayed away from them,” said Rutvik Doshi, managing director, Inventus Capital Partners.

“But in the last three-four years, the way technologies have evolved, hardware is no longer a standalone... it plays along with software,” Doshi added.

The company’s other two India managing partners are Samir Kumar and Parag Dhol.

The India unit of the early-stage fund, which has invested in 27 start-ups, closed its third fund in October last year at Rs 370 crore. From this corpus, the firm is looking to invest in 14-15 start-ups, including five this year. While the firm is looking at investing anywhere between Rs 5 crore and Rs 15 crore in each, the funding amount can go up to Rs 40 crore depending on the performance of the start-up. A fourth fund could be announced by the end of next year.

From Inventus III, the VC firm has made five bets so far, including BluArmor, enterprise start-up Worxogo, augmented reality-based toy venture PlayShifu, local discovery platform LBB, and blockchain-based start-up KoineArth.

The firm had made three successful exits last December, including PolicyBazaar, Aasaanjobs and Funtoot. Inventus Capital’s partial stake sale in PolicyBazaar to SoftBank earned the company a 15-times return at over Rs 170 crore. It had made a 22-times return on investment when it sold its stake in RedBus to South African media conglomerate Naspers’ Indian arm in 2013, said Doshi.