In a bid to support India’s early-stage startup ecosystem, founders of Hyderabad-based venture capital firm, Parampara Capital, have announced the launch of a new fund— Inflexor Technology Fund.
Initiated by Venkat Vallabhaneni, a serial entrepreneur and Jatin Desai, former Chief Information Officer of Bank of America, the duo will manage the fund as managing partners. They have also worked together for close to 20 years before.
Pratip Mazumdar (ex-IDFC Alternatives) has also joined Inflexor as a Partner to strengthen the fund team for the new fund launch.
With offices in Mumbai, Bengaluru and Hyderabad, Inflexor Technology Fund is looking to invest across sectors with a focus on companies leveraging technology IP/ innovation. The founders are targetting to raise $100 Mn corpus from international investors.
Talking to Inc42, Jatin Desai, managing partner, Inflexor Ventures said that the investors may include early investors of fund 1 of Parampara Capital. He added that the fund is targetting the first close in Q1 of FY21.
The Plan For Inflexor Fund
The Fund plans to do participative investments in disruptive technology startups, from seed to Series A+, that solve real-life problems and have domestic and international markets potential. Inflexor fund is looking to invest in early-stage companies that have achieved a basic product-market fit along with early commercial validation.
The fund will write initial cheques of $500K – $1 Mn with up to $2 Mn-$4 Mn more for follow-on rounds in portfolio companies based on growth and capital required.
Having backed several startups from Parampara fund, Venkat Vallabhaneni, managing partner, Inflexor Ventures told Inc42 that they plan to invest in 20 companies over the course of the fund.
In terms of sectors, the fund is interested in healthtech, fintech, consumer-tech, cleantech, edtech, agritech and others. Desai said, “As an active participant of the early-stage VC ecosystem in India, it is our constant effort to identify companies which are at an inflexion point in their journey and help them scale up to become category leaders in their respective sectors and we hope to contribute further to it with the launch of our second fund”.
Venkat Vallabhaneni, Managing Partner, Inflexor Ventures said, “Over the past few years, we have seen the emergence of quality entrepreneurs and unique business models in the country. Such developments go a long way in adding fuel to our passion of finding the right teams and staying invested in their long-term growth plans.”
Early Stage Startup Ecosystem
At present, there are over 416 venture funds who have a focus on the early-stage startups in India. The marquee VC funds like Tiger Global Management, Sequoia Capital India, Blume Ventures, Nexus Venture Partners among others are already working in parallel with angel networks, HNI’s and corporate investors; and aggressively trying to bridge the gap between early-and late-stage ecosystems.
When it comes to early-stage seed funding, the Indian startup ecosystem is going through a slowdown. DataLabs by Inc42 has noted that startups are seeing bigger deals in terms of value with the average ticket size of funding recording its historical peak of $21 Mn in 2019, so naturally, the ecosystem is going into 2020 with great expectations.
However, in 2019, the seed stage funding continued to fall. With $252 Mn in funding, the seed-stage deal value fell by 44% (compared to 2018) as only 306 seed funding deals were recorded.