After pumping hordes of capital into India-focused PE-VC firms over the past few years, investors have started tightening their purse strings, queering the pitch for those looking to hit the fundraising trail.
“2023-24 has been a tough year compared to the influx of capital in the VC ecosystem in 2021. Multiple stakeholders have highlighted the challenging fundraising environment,” Pratip Mazumdar, co-founder and partner at sector-agnostic, technology-focused fund Inflexor Ventures, told DealStreetAsia in an interview.
Inflexor recently made headlines when it announced the first close of its Opportunities Fund at Rs 280 crore, which is 80% of its Rs 350-crore ($41.5 million) target.
Interestingly, a part of the capital, the VC said, would be used by its dominant LP — HDFC AMC — to acquire the entire portfolio of assets of its maiden fund, in a first for the VC industry in India.
Neo Asset Management, which is a part of wealth management startup Neo Group, is also said to be in talks to acquire stakes in a few portfolio companies of Peak XV Partners (formerly Sequoia Capital India & SEA) as it looks to foray into the PE-VC space.
“Secondary sale of portfolio of assets or individual assets is quite active globally in both the private equity and venture capital space. In India, over the last decade or so, a handful of transactions have been undertaken mostly on the private equity side of the business and not much on the venture capital side,” said Mazumdar.
Edited excerpts of the interview: