The glut glut TechCrunch Inside the US’ epic first-quarter venture capital results Read more in the global risk capital supply has venture capitalists pouring money into new and follow-on investments. Unsurprisingly, the gust of eye-popping valuations has swept swept Economic Times 4 days, 6 unicorns, $1.55 billion — A week like none other for Indian startups Read more through consumer tech companies. Still, far from the madding headlines, as the pandemic-led winds of change continue to blow, a few deep-tech-focused investors are trying to build windmills.
Hyderabad-headquartered Inflexor Ventures closed its second fund of Rs 500 crore (US$66.7 million)—with a further Rs 200 crore (US$26.7 million) green shoe option green shoe option Green shoe option A green shoe option allows a venture capital or private equity firm to raise capital over and above its original target —in record time. Half the Limited Partner (LP) contribution came from family offices. In the next few weeks, Mumbai-based Exseed Electron Fund will announce its first three investments—made from the first close of Rs 150 crore (US$20 million) of the firm’s Rs 450 crore (US$60 million) maiden fund.
For many years, a smattering of government grants government grants The Ken Through the Birac-ulors: The odds for India’s only lab-to-market engine Read more and their contributions to fund-of-funds fund-of-funds Fund of funds A fund of funds is a pooled fund that invests in other funds. have supported deep-tech startups across the country. Nearly all have remained warm-up rounds though, rarely going beyond Series B or C. This has meant that even a US$100 million exit in this space looks like a moonshot.
Taking long shots in a difficult market like India on fledgling businesses that aim to solve unloved problems requires a different game plan or mindset, even. The current rat race in venture capital is more about the dry powder dry powder Preqin 2021 Preqin Global PE and VC Report Read more investors are sitting on, which they need to deploy. “They are on a time schedule to do this,” says Mahesh Murthy*, investor, entrepreneur, and the fund manager of Exseed. You don’t have to think too much to put US$50 million as part of a unicorn race, but putting US$500,000 as part of a deep-tech seed stage requires a lot of work, he says.