2023 Poised To Become Substantial Market For VC Funding: Co-founder, IPV

Inflection Point Ventures (IPV) is an angel investing platform with over 7,400 CXOs, HNIs, and professionals who invest in startups. The firm supports new-age entrepreneurs by providing them with monetary and experiential capital and connecting them with a diverse group of investors. 

With the evolving global landscape, climate-tech is poised to be an interesting sector. The growing impact of climate change due to greenhouse gas emissions has been a dominant cause for concern around the world, gaining investors' attention.

"The tech world has seen a significant increase in interest in climate tech startups. Climate-focused funding in private markets is projected to continue over the next decade, with the industry expected to reach $1.9 trillion by 2030,"  Ankur Mittal, Co-founder of Inflection Point Ventures (IPV), said. IPV invested about Rs 6 crore in green energy startup Buyofuel to support the same cause.

Apart from the green space, the venture capital firm has also invested in sectors such as manufacturing, agritech and transportation.

Spardha, an unconventional startup, received over Rs 7.5 crore from IPV in May 2022. The startup is a one stop solution for providing quality training, workshops and personalised guidance in guitar, keyboard, vocals and drums in a very convenient and accessible manner. We offer a high-quality local yet nationally integrated platform where anyone and everyone can conveniently participate and learn new skills, groom their talent or skill in diverse fields or areas and showcase their talent or skill to the outside world.

Commenting on the potential sectors to keep an eye on, Mittal said, "Fintech has been a rapidly growing field in recent years, with new technologies and business models being developed to make financial services more accessible, efficient, and secure. The healthcare sector is likely to continue to grow and evolve, driven by factors such as an ageing population, advances in medical technology, and increasing demand for healthcare services."

In 2022, IPV invested close to Rs 8 crore in agritech startup Falca. It has raised a total of $3M in funding over 2 rounds. Their latest funding was raised on October 6, 2022, from a seed round. Falca is funded by four investors. LetsVenture and Inflection Point Ventures are the most recent investors.

Further, the funding crunch is something that has forced the promoters to cut down on headcounts and keep a check on hiring. On the same line, Mittal explained that while today’s investors are taking a more selective approach to VC investments, funding remains significantly higher than in 2020. All signs show that 2023 is poised to become a substantial market for VC funding. The trick for investors is to know where to invest their hard-earned money in order to generate the most significant returns."

Ben & Gaws is another portfolio company of IPV. In August this year, the VC firm invested over Rs 7.5 crore in the startup. Ben & Gaws's operating revenue range is Rs 1 crore to Rs 100 crore for the financial year ending on March 31, 2021. Its EBITDA (earnings before interest, taxes, depreciation, and amortisation) has increased by 262.86 per cet over the previous year. At the same time, it's book value has increased by 55.94 per cent.

He added that IPV’s investment target for 2023 is Rs 250 crore, following the same strategy that we started IPV with. 

As the funding ecosystem is constantly evolving, investors are looking for other asset classes that can fetch them a promising return. Mittal, precisely touching on IPV’s investment strategy, said, "We invested in startups from a variety of sectors, adding strength to our diversified portfolio. We’ve also continued to invest in tech to improve investors' experiences. Our strategy for 2023 remains unchanged from what we did in 2022; we will continue to invest in good businesses run by great founders; we look for opportunities available at fair valuation; and we will stay sector, stage,and geography-agnostic."

SaaS emerged as one of the favourite sectors for VCs in 2022. SaaS startups often focus on providing specialised software solutions to businesses or consumers, with the goal of simplifying complex processes and improving productivity. SaaS offers profitability-focused growth by reducing costs, improving efficiency, increasing sales, and expanding into new markets.

"In order to achieve profitability-focused growth, startups need to make significant investments in areas such as research and development, marketing, and operations. IPV being a sector-agnostic platform, was able to pursue this across different sectors and not just SaaS," Mittal stated.

Climate-tech, or Green-tech is one of the biggest growth areas in the field of innovation and startups, globally. The investing and startup ecosystems are starting to focus more on sustainability and environmental impact. This shift towards a climate-conscious strategy is being driven by a number of factors, including increasing public awareness of the need to address climate change, government policies and regulations that support sustainable business practices, and the growing demand for environmentally friendly products and services.

Mittal added that investors and entrepreneurs are increasingly looking for opportunities to support companies that are focused on reducing their carbon footprint, using renewable energy sources, and developing sustainable products and services. This trend is expected to continue in the coming years, with the green-tech industry poised to play an increasingly important role in the transition to a more sustainable and resilient future.