Angel investing platform Inflection Point Ventures (IPV) said on Thursday that it generated an internal rate of return (IRR) of around 36% for its investors from 14 exits in 2024.
The returns were lower than the 61% IRR achieved from the same number of exits in 2023. The company said this was due to challenging market conditions. "Despite the market slowdown, our ability to deliver consistent exits reflects the strength of our portfolio and the trust we’ve built with both investors and founders," said Vinay Bansal, founder and CEO of IPV, in a statement.
Since its inception, the Gurugram-based platform, which has invested in companies like BluSmart, Otipy and Stage, has exited 47 companies out of a portfolio of 230 startups.
In 2024, the company, which was founded by Bansal, Ankur Mittal and Mitesh Shah, fully exited from three startups and partially exited from 11 others. Notably, it achieved a 28% IRR with a 2.17x return from the acquisition of AI-driven platform for renewable energy assets, Prescinto AI, by IBM.
In August 2024, IPV claimed a 33% IRR and a 3.75x money-over-money multiple after fully exiting Fashor, an ethnic wear brand that raised $5 million (Rs 42.9 crore) in funding from Blume Ventures.
Additionally, IPV achieved a 30% IRR with a 2.2x money-over-money return in three years from its investment in US-based data protection company Parablu, which was acquired by CrashPlan in October.
"Consolidation is going to be the name of the game in the current year also. Overall, the environment is better, more conducive for exits," Mitesh Shah, IPV’s co-founder, told VCCircle. Shah said the number of investments this year will be higher. "We will continue to invest aggressively and continue to scout for more exits."
Some of IPV's investments were structured as blended primary and secondary transactions, offering optional exits for its investors, which resulted in 30-40% IRRs and 3-4x returns, the company said.
While none of the exits in 2024 were considered failures, Shah mentioned that some portfolio companies did not meet expectations. To date, 23 investments have been written off. However, he noted that the failure rate is less than 10%, with the majority of IPV's investments showing a "very high success rate". He did not specify which startups did not meet expectations.
"In 70% of the cases, the reason for failure is (the) founding team or coordinating execution capabilities. I think it's about giving equal or more weightage to founding teams, not only their pedigree or credential, but their execution capability as well in different environments," Shah explained.
IPV launched its maiden venture capital fund, Physis Capital, in 2022 to invest in pre-Series A to Series B growth-stage startups. The fund is currently in the process of raising capital and has extended the final close timeline of its $50-million vehicle to 2026, having raised Rs 150 crore from its limited partners so far.
