Early-stage venture capital firm Inflexor Ventures aims to close its Rs 500-crore fund by March next year, and the proceeds will be invested in about 25 companies over the next few years, a top executive said.
Inflexor Technology Fund, which was set up by the founders of the erstwhile Parampara Fund, had made the first close of the Rs 500 crore fund in August this year, at Rs 230 crore.
Speaking to PTI, Inflexor Ventures Managing Partner Venkat Vallabhaneni said the latest fund is focussed on technologies that are making a deep impact on the society.
"Mostly, we invest in early-stage companies that are making some revenue and have customers. Generally, we enter with a Rs 5-7 crore cheque and after that we stay with the company through their growth," he said adding that there is a follow-on funding of up to Rs 15-20 crore based on performance, growth and capital requirements.
Vallabhaneni added that the latest fund will allocate around Rs 25 crore in financing over a period of three years.
Inflexor Technology Fund had recently announced its first investment in Steradian Semiconductors, a deep-tech startup that is developing 4D imaging radar solutions for Autonomous Vehicles with their patented and proprietary IP.
"The (latest) fund size is Rs 500 crore, of which we have already raised Rs 325 crore. It is from a combination of institutes and HNIs, and SBICap Ventures is an anchor investor and SIDBI has also participated. Hopefully Q1 (January-March), we will close the fund," he said.
The fund also has a green shoe option of Rs 200 crore.
Vallabhaneni explained that in the last 15 years, there has been lots of advancement in the consumer tech space but "winds are changing towards the enterprise sector as well".
He said the first fund of Rs 75 crore was deployed in 12 companies including firms like Atomberg, PlayShifu, Bellatrix Aerospace, Entropik Technologies and CloudSEK. Of these, Inflexor has exited one organisation.
"One of the reasons for the larger second fund is, we saw that outside our investment (in startups through fund I), about Rs 460-470 crore worth of funds flowed into these companies apart from our investment. If we had a bigger fund, we could have had a bigger exposure," he said.
Vallabhaneni said Inflexor Ventures is in discussions with multiple startups for investment, and will finance in 20-25 companies via the new fund.
"(About) 70 per cent of the Rs 500 crore will go to pre-series A, where we enter the company with Rs 5-7 crore and we will continue to increase our exposure over the next three years, so our exposure for each company would be Rs 25-30 crore," he said.
The rest (30 per cent) would be for mature companies (series A and beyond) and stay invested for 4-5 years, he added. Inflexor Technology Fund will primarily look to back startups working in the enterprise space including AR/VR, Big Data, Robotics, Cybersecurity, Blockchain, IoT, and other sectors.
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