How early-stage investment firm IPV weathered Covid crisis?

Most investors turned cautious in a pandemic-struck 2020. But, early stage investment firm Inflection Point Ventures (IPV) bucked the trend and invested ₹76.5 crore in 30 start-ups with plans to double that investment in 2021. Vinay Bansal, founder and CEO, tells BusinessLine about the sectors he plans to invest in, start-up valuations, plans to ramp up individual investors from 3,500 to 5,000 by the year-end.

Since our inception in 2018, we have grown 100 per cent YoY; 2020 was no different and we expect to maintain the same growth momentum in 2021. While deal flow has increased multi-fold, IPV’s individual investor member base has grown to 3,500, which has contributed to the momentum in investments.

We are projecting an investment of ₹155 crore in over 60 start-ups. Some of our portfolio start-ups include Milkbasket, Otipy by Crofarm and iKure, which recently raised an Angel round from Ratan Tata. IPV is a sector/stage agnostic investment platform and we see EdTech and E-Gaming start-ups approaching us for funding. However, we have announced three investments since January, in sectors like kids activity platform HobSpace, microsavings app Siply, career guidance platform Mindler and will shortly announce our investment in a content-tech platform.

The journey to signing our first 100 investor members was the most challenging because we were trying to do something new that hasn’t been attempted before. Since then our member strength has grown to 3,500 because there are CXOs in India who have a sizeable disposable income which they want to deploy in new asset classes such as start-ups, given that traditional asset classes such as real estate and stock market have not given them consistent returns. Our goal is to have over 5,000 members by the year end.

We don’t see that happening because we are being trusted by founders and investors. For a country like India, which is already the third biggest start-up hub in the world, investing in 60-80 start-ups this year won’t pose a challenge. This can also be substantiated looking at our current deal flow and investments in progress.

Valuation is a function of market sentiment and the sector in which the start-up is positioned. While the Covid vaccine is being deployed, the recovery in the economy may take a bit longer for any visible impact. We believe valuations would remain rational for a good part of this year. However, some select start-ups which are able to show a clear path to profitability, unit economics, a scalable yet executable business plan to investors are likely to see an uptick in valuations. But those would be very few growth stage start-ups.

We have invested ₹100 crore in over 50 start-ups to date. We have closed five exits and 10 follow-ons. Just last month, we exited Fitso in a secondary sale to Zomato earning 40 per cent IRR for our investors within a year of investing. This year looks exciting and we are in discussions for follow-on rounds for 5-10 start-ups and exits in a few cases.

From an industry standpoint, we expect SaaS platforms, healthtech and gaming platforms to attract investments. Online first and D2C brands are expected to emerge bigger this year in terms of getting funded and growing at an accelerated pace.

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