Early stage start-ups have seen an average 20-25 per cent correction in valuations in the ongoing funding winter, Vinay Bansal, Founder and CEO of Inflection Point Ventures (IPV) told businessline.
He added that valuation corrections varied by sectors and business models. “The range of valuation drop has been very wide, with some early stage companies also witnessing 50 per cent valuation cuts,” said Bansal.
Further, he noted that IPV increased its pace of investments amid funding slowdown as the valuation became reasonable and the firm was able to access better deals and founders. Bansal believes that the funding slowdown in start-up ecosystem will continue for another 6-9 months.
IPV is an angel network of 7300+ investors including CXOs, HNIs (high net-worth individuals) and working professionals. The firm had announced a $50 million fund in March 2022 and will start deploying it from April 2023. This year, the firm expects to invest about ₹200 crores across deals, with an average ticket size of $5,00,000.
IPV is a sector-agnostic firm but Bansal believes sectors like fintech, healthtech and climate tech, have become more relevant in the current context. “We always go after businesses, which are solving for the customer needs and are being run by good management teams, among other factors. Being a sector-agnostic firm, any place we see a big problem being solved by a good set of founders, we are interested,” he added.
Commenting on the growing number of corporate governance issues in the ecosystem and ways IPV tried to prempt such issues, Bansal said, “We can never be 100 per cent sure that these issues will not occur. Nobody can be. So, we try to capture it and minimize risk by building a deep understanding of the founder, the culture etc. We are also very sharp with the founders. We give them clear messages and do not allow them to pass red flags, etc.”