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Deeptech focussed venture capital firm, Inflexor Ventures which has invested in companies like spacetech firm Bellatrix Aerospace, emotion recognition technology Entropik, among others, is in the process of investing in another spacetech firm as the sector heats up.
BusinessLine spoke to Jatin Desai, Managing Partner at Inflexor Ventures about the growth of spacetech tech start-ups and the firm’s ₹600 crores fund. Excerpts:
You closed a ₹600 crore fund last year. How many investments have been made from that fund and what is the plan for this year?
From fund two, we have announced seven investments till now and two are under closure. So, hopefully by the end of April or the next month, we should be able to announce both of those investments. That will bring us to nine investments out of the second fund. Our plan with fund two is to do around between 20 to 25 investments and our average ticket size will be between $3 to $4 million. Specifically in this year, we have announced one investment in Jan and expect to do a total of seven investments in 2022.
As one of the early investors in the spacetech sector, what is your analysis of spacetech start-ups in India? Do you see growing investor confidence in the space now?
From our fund one, we were among the earliest institutional investors in spacetech when we invested in Bellatrix Aerospace. This is a high risk, high reward kind of investment, sort of R&D and academic. But, I think things have definitely changed now. Recently we heard a million $25 million funding announcement from a spacetech start-up. In fact, out of the two investments that we expect to close by April end, one is a spacetech start-up.
While these companies are currently not in the commercial stage, I think in the next 18 to 24 months, some of these funded start-ups should start seeing revenue from the new technology or the IP products they are building. It’s one of the opportunistic sectors that we are quite bullish on. We just need one or two good success stories and then there is going to be a slew of spacetech companies. Because I think there are spacetech use cases both in the commercial and defence sector.
Lately, start-up ecosystem has seen a growing number of governance issues at various companies like BharatPe, Trell, Infra.Market etc. Why do you think these cases have started surfacing this year?
Particularly the last two to three years have been unprecedented for the Indian start-up ecosystem. I’m part of the generation that built the IT services ecosystem in India. That was also a boom, but it was nothing like this. A bit of excess will always create some of these issues. People were rushing to close deals, large deals were being closed in about two to three weeks. So to some extent, it was bound to happen and some of it is growing pains. Some of it is part of the maturity cycle and the industry is also learning from these cases.
Do you think the start-up ecosystem is undergoing a funding slowdown?
It has slowed down a bit, but I’m not seeing a significant slowdown. Deals are being announced every week. Things were slightly overheated in the last six to eight months, some slowdown may actually be healthy for the ecosystem. It makes people take a step back and see how things are playing out. Some of it is also a reflection on what’s happening in the listed markets, a lot of wealth has been destroyed when the listed markets turned down.
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