After Bellatrix, Inflexor Ventures will be looking to invest in startups creating IPs around satellite services

• After investing in space technology startup Bellatrix, Inflexor Ventures co-founder Venkat Vallabhaneni now has his eye on telecom and remote sensing startups.
• In an interview with Business Insider, Vallabhaneni highlights how the fund is now looking to invest in startups that go beyond the 'core' space industry.
• According to him, softer sectors is where next set of intellectual property (IP)-heavy startups will emerge.

Space technology startups have become a hot commodity ever since the Indian government opened up the sector to private players last year. Inflexor Ventures co-founders, Jatin Desai and Venkat Vallabhaneni, threw their hat in the ring well before 2020, with Bellatrix — a startup developing satellite propulsion systems.

Vallabhaneni, a postgraduate from the New Jersey Institute of Technology (NJIT), believes that softer sectors like telecommunications and remote sensing can be taken to the ‘next level’. And that’s where the fund will focus next.

“Many startups will come with services around satellite use. That’s where we would be focused on as well — beyond the core industry, what are the auxiliary areas where the startups will come in. We would be very very keen to look at those industries,” he told Business Insider in an interview.

Inflexor Ventures has ₹700 crore to invest

Inflexor Ventures’ current target corpus size is ₹500 crore for domestic investors and greenshoe of another ₹200 crore. The company plans to deploy at least 60-70% of its fund size in the next two-three years. “We plan to fund a total of six to eight startups in a financial year,” said Vallabhaneni.

This is, however, spread out across different categories of technology startups — not just space technology. But space technology is where Vallabhaneni believes the most money is to be made. “Space [sector] has got nonlinear kinds of dividends, so the growth is non-linear as well… I’m pretty optimistic about the space sector,” he said.

Simply put, space startups have a better shot at hitting hyper growth and bringing in revenue than other startups in other sectors. While things like human spaceflight may sound fancier, they are not likely to be a focus for Inflexor Ventures from the India point of view.

More data, more connectivity

The demand for data is growing at an exponential rate, and at the same time, getting access to space is getting exponentially cheaper. “Satellites or rocket launchers are only one aspect. The industries around that, whether it’s telecommunications, services, ground equipment, that build around the ‘core’ space industry — that’s what is very very exciting,” Vallabhaneni told Business Insider.

Demand for data isn’t just about casual users like you and me being online. Services like autonomous cars, the Internet of Things (IoT), artificial intelligence (AI) and virtual reality need huge amounts of bandwidth to function as they find new use cases.

Global financial firm Morgan Stanley believes that the most significant short and medium term opportunities will come from satellite broadband internet access. It makes up for 50% of the projected growth of the global space economy by 2040 — set to hit $1 trillion.

Another report by Northern Sky Research highlights that connectivity-focused use cases dominate the revenue opportunities in the global space economy.

“If there can be improvements in IP creation, around that area, how telecom services around satellites can be taken to the next level, that will be a very very interesting area,” said Vallabhaneni.

Inflexor Ventures is ‘waiting and watching’

“You can’t just look at the current year,” said Vallabhaneni. Space technology startups require a long gestation period, according to him. Allied space technology sectors may not have as long a gestation requirement as ‘core’ sectors, but things like IP-creation and the high financial cost are high barriers to entry.

Aside from Bellatrix, the fund is not looking to invest in other ‘core’ space technology startups in the short term. Inflexor Ventures is watching the up and coming startups, which are looking to capitalise on satellite services but Vallabhaneni was reluctant to mention any entrepreneur by name.


“At this time Bellatrix has a long way to go and we’ll continue to help its growth, but we’ll invest in the industries around that as well,” he said. Bellatrix is yet to make any announcements but is currently negotiating with investors for its Series A round of funding. “They’re looking at raising the next round, which is likely to happen in the next few weeks,” said Vallabhaneni.

SEE ALSO:
Twitter is at odds with the Indian government over new laws — reigniting the age-old battle of national interest versus freedom of speech

Exxon, Chevron and Shell are being forced to do something about climate change — and this is only the beginning of the big test for big oil