Funding slowdown helped IPV strike good deals in 2023 | Mint
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Business News/ News / India/  Funding slowdown helped IPV strike good deals in 2023
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Funding slowdown helped IPV strike good deals in 2023

The investment deals took very long to close, and this helped IPV in carefully finalizing its own investment decisions, co-founder Mitesh Shah said

Mitesh Shah, co-founder, Inflection Point Ventures.Premium
Mitesh Shah, co-founder, Inflection Point Ventures.

Bengaluru: It was a buyer’s market for angel investment company Inflection Point Ventures insofar as 2023 goes. A funding slowdown for startups led to a correction in their valuations. A subdued investor activity meant there was no fear of missing out (FOMO), helping the Gurugram-based company make better investment decisions at ease, its co-founder Mitesh Shah said.

Venture capital funds were on the fringes last year, Shah said, adding that Series A financing rounds that would usually take 3-4 months to close, suddenly started taking 8-9 months.

“We started last year on a muted note on the external environment. It seemed it will be a difficult year for startups to raise funds, and for our existing entities to raise follow-on rounds, and for us to secure exits. It also meant it would be an investor’s market, as there would be plenty of opportunity for us to invest at good valuations," he said.

The investment deals took very long to close, and this helped IPV in carefully finalizing its own investment decisions, Shah said, pointing out that there was no fear of missing out in the market.

“We were happy because FOMO destroys sanity. In 2022, while there was quality deal flow, there were many new investors and much liquidity chasing few startups. In 2023, investors started realizing we should wait for some exits and investor activity generally slowed down."

“In terms of quantity, there was never a dearth. In terms of quality, I am very happy that we managed to grab some good deals and the environment helped us because the valuations were much more sane," he said.

In 2020, the early-stage investment platform looked at about 4,000 startups and ended up investing in about 57, according to Shah. In 2023, it looked at about 5,500 startups and invested in 57-58.

“In 2022, we did 15 exits and last year also we did 15 exits."

The firm invested in startups like dairy-tech startup Happy Nature, AI platform EaseMyAI and frozen food startup FroGo among others.

Talking about valuations, Shah gave an example of corrections in the D2C market. “While valuations skyrocketed to six to eight times of revenue, today they have corrected to two-three times ."

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Published: 17 Jan 2024, 09:54 PM IST
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