Inflexor Ventures is a sector-agnostic venture capital firm investing in technology-based early-stage companies. It was an early investor in startups like PlayShifu, Entropik, and Bellatrix, and currently holds a portfolio of 26 companies. Harsha Mundhada, a partner at Inflexor Ventures, discusses the company’s focus on technology-driven innovations, and the launch of its third fund. Edited excerpts from the interview:
How many funds have you deployed till now?
Inflexor was set up in 2015 as a tech-focused fund. The first fund was about ₹75 crore. Of the ₹608 crore second fund, we have made about 16 investments and will probably make two or three more.
We aim to launch our third flagship fund in CY25, and may go up to about ₹1,200 crore. We recently launched the ‘Opportunities Fund’, acquiring the entire portfolio of our fund 1, instead of cherry-picking the top-performing companies.
What is the strength of your current portfolio? What is your time horizon for investment?
Our portfolio companies include Atomberg, PlayShifu, Kale Logistics, and a cybersecurity firm called CloudSEK.
We have a few AI-based firms like Entropik, Vitra.ai, and Ayna; fintech firms like CredFlow; Bellatrix Aerospace, which is into space tech; and NoPo, which does material sciences.
Our investment horizon is five to seven years.
Which sectors are you bullish on?
We look at tech as a horizontal, and not vertical segment. We look at sectors with a strong interplay of technology. We are extremely bullish on consumer tech, including products and the technologies supporting them.
In the enterprise technology sector, we see many products developed in the country, whether in cybersecurity or using AI.
In the deep-tech segment, we have invested in space technology and materials technology, where we see more opportunities. Climate and sustainability is another such sector.
What is your investment thesis?
Our investment thesis is typically on the technology side.
We would like to come in at the seed to pre-series A and Series A stage with the first institutional cheque, offer follow-on investments for the next two rounds, and then continue working closely with the company.
Typically, we prefer 10-15 per cent stake, with long-term value addition from us.
When we look at companies, the three focus areas are team, TAM [total addressable market], and conviction. With TAM, we look at a large market. Although some are niche solutions, the market size can be large.
We see if it is scalable, with at least $100 million revenue in the next 10 years.
What is your average cheque size?
We like to do $2-3 million as our first cheque. For seed deals in pre-revenue companies, our cheque size can go as low as $500,000 to $750,000.
We go up to $7-8 million in total investment, including two follow-on rounds.
Have you had any exits to date? What kind of exits do you prefer?
We made a few exits from our first fund. The rest of the portfolio was transferred to the Opportunities Fund, led by HDFC AMC as an anchor investor.
We’ve done three complete exits — S-Cube and Steradian Semiconductors, with an early and strategic exit, while SecurTime was acquired by ADP Systems.
In Atomberg, which raised capital from larger financial institutions like A91 Partners and Temasek, we exited a partial holding for a smooth transaction.