Early-stage VC Inflexor eyes Q2 first close of $150-million Fund-III
ETtech
Synopsis
Early-stage venture fund Inflexor Ventures expects to announce the first close of its $150 million (Rs 1,250 crore) Fund III by the end of the second quarter, partner Murali Krishna Gunturu told ET. Alongside its core interest areas, such as artificial intelligence (AI), the new fund will also invest in companies developing healthcare devices and advanced materials, including those used in electric vehicle (EV) batteries.
By Vaibhavi Khanwalkar, ETtech
Early-stage venture capital firm Inflexor Ventures is eyeing the first close of its $150 million (Rs 1,250 crore) Fund III by the end of the second quarter, partner Murali Krishna Gunturu told ET.
“We have begun raising funds and (are) aiming for the first close by the second quarter of financial year 2026,” Gunturu said. “The fund is focusing on companies making healthcare devices and advanced materials like EV (electric vehicle) batteries and foundational large language models (LLMs); sectors which are less crowded and more differentiated.”
Inflexor Ventures intends to invest in 25-27 startups with this fund, with its portfolio companies crossing 50. “Our sweet spot is between pre-series A and series A, with cheque size of about $2.5-3 million, eyeing about 15% stake," Gunturu said.
With more than $120 million in assets under management, the firm has so far invested in 25 companies across sectors such as cybersecurity, artificial intelligence (AI), space tech and consumer tech.
Gunuturu stressed the importance of developing local LLMs tailored to Indian languages, citing Sarvam AI and Krutrim as prime examples. The fund is doubling down on generative AI in India with Fund III.
Inflexor closed its Opportunities Fund, with HDFC Asset Management Company leading the acquisition of its first fund, due to a time crunch. "The pressure on exits is only going up, not just in India, but globally as well," Gunturu said. “Limited partners invested in many startups between 2020 and 2022 with high expectations from VCs (venture capitalists), seeking returns within five or so years. But now there is a sense of disillusionment."
Founded by Venkat Vallabhaneni, Jatin Desai and Pratip Mazumdar, Inflexor Ventures focuses on deep and emerging technology startups. Gunturu, a founding member of the fund, has also worked with EY. He led the firm’s investments in PlayShifu, Bellatrix Aerospace, CredFlow, ClickPost, NoPo Nanotechnologies and CloudSek.
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The fund, which has backed the likes of consumer durables maker Atomberg, spacetech startup Bellatrix Aerospace, CredFlow and Bioprime Agrisolutions, has also closed its Rs 350-crore Opportunities Fund by acquiring the entire investment portfolio of its first fund (Parampara Capital), providing liquidity to its initial investors.“We have begun raising funds and (are) aiming for the first close by the second quarter of financial year 2026,” Gunturu said. “The fund is focusing on companies making healthcare devices and advanced materials like EV (electric vehicle) batteries and foundational large language models (LLMs); sectors which are less crowded and more differentiated.”
Inflexor Ventures intends to invest in 25-27 startups with this fund, with its portfolio companies crossing 50. “Our sweet spot is between pre-series A and series A, with cheque size of about $2.5-3 million, eyeing about 15% stake," Gunturu said.
With more than $120 million in assets under management, the firm has so far invested in 25 companies across sectors such as cybersecurity, artificial intelligence (AI), space tech and consumer tech.
Gunuturu stressed the importance of developing local LLMs tailored to Indian languages, citing Sarvam AI and Krutrim as prime examples. The fund is doubling down on generative AI in India with Fund III.
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“Only a few can do it, though. It needs a large amount of capital and massive engineering capability," he said. “There is space in the Indian startup scene to build smaller language models, tailored for specific sectors like healthcare or manufacturing.”Inflexor closed its Opportunities Fund, with HDFC Asset Management Company leading the acquisition of its first fund, due to a time crunch. "The pressure on exits is only going up, not just in India, but globally as well," Gunturu said. “Limited partners invested in many startups between 2020 and 2022 with high expectations from VCs (venture capitalists), seeking returns within five or so years. But now there is a sense of disillusionment."
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Investment activity has picked up since the Covid-19 lull, he said, adding, “From the second half of 2024, startups raising money have also increased, and funds are more open to deploying capital. Growth-stage investment is still cautious, but early-stage has revived.”Founded by Venkat Vallabhaneni, Jatin Desai and Pratip Mazumdar, Inflexor Ventures focuses on deep and emerging technology startups. Gunturu, a founding member of the fund, has also worked with EY. He led the firm’s investments in PlayShifu, Bellatrix Aerospace, CredFlow, ClickPost, NoPo Nanotechnologies and CloudSek.
