The key signals that Inflexor Ventures looks for while investing in deeptech startups

India’s deeptech ecosystem is at an inflection point. After years of early experimentation, the conversation has begun to shift from scientific ambition to questions of commercialisation, capital efficiency, and global scale. 

The shift is also being backed by policy. The government’s Rs 1 lakh crore Research, Development and Innovation fund—designed to support deeptech through a mix of concessional capital and fund-of-funds structures—signals a move towards patient, long-duration financing for science- and engineering-led startups. 

Venture funding into deeptech has also picked up, with capital commitments rising across defence, space and manufacturing, even as questions around scaling and late-stage funding remain.

While the deeptech ecosystem has gathered momentum in recent times, Inflexor Ventures realised the potential of the sector more than a decade ago. 

The Mumbai-based VC firm began investing in technology-led businesses as early as 2015, well before ‘deeptech’ became a defined category in India. Its bets in the segment include engineering-led appliance brand Atomberg, Bellatrix Aerospace, and NoPo Nanotechnologies. 

Murali Krishna Gunturu, Partner at Inflexor Ventures, believes India’s biggest strength in deeptech is its ability to apply fundamental technologies to real-world problems. 

When it comes to investing in deeptech firms, Gunturu says the VC firm looks for a working product, early customer or institutional validation, and independent confirmation that the technology works. 

Inflexor is currently raising its third fund of around Rs 1,200 crore, which will primarily invest at the pre-Series A and Series A stages in companies with a working product and commercial traction. Medical devices and space technology are two areas that excite the VC firm the most. 

In an interview with YourStory, Gunturu details the firm’s thinking behind backing science-, engineering- and technology-led companies, what signals matter before product–market fit is visible, and where India’s edge in deeptech is beginning to emerge.

Edited excerpts: 

YourStory (YS): Inflexor was early to the deeptech game, making several bets in this segment. What signals do you look for before product-market fit is obvious?

Murali Krishna Gunturu (MKG): When we started in 2015, our focus was on investing in companies built on technology, IP, and innovation, primarily in the B2B space.

A good example is Atomberg. When we invested, they were selling energy-efficient fans to ceramic and textile factories in Gujarat. These factories would replace thousands of conventional fans with Atomberg’s fans because the energy savings meant the payback period was less than a year. The founders had taken BLDC motor technology and applied it to a new use case.

This illustrates what we look for: companies that deliver a strong value proposition using technology. Over time, we refined our framework. Today, we broadly categorise companies into science-led, engineering-led and technology-led businesses. Aerospace companies would fall under science. Atomberg is an engineering-led company. AI startups are technology-led.

Our original intent was not specifically to invest in deeptech. We wanted to invest in technology-driven businesses. Deeptech became a natural subset of that thesis.

In deeptech specifically, early validation is critical. For example, when we invested in Bellatrix Aerospace, they had already built a prototype and were working with ISRO. That validation from a credible customer gave us confidence. Beyond that, we also conducted technical diligence through independent experts.

So, the key signals we look for are: a working product, early customer or institutional validation, and independent confirmation that the technology works.

YS: How important is early customer validation in deep tech investing?

MKG: Even without revenue, early customer interest is an important signal. If a credible customer, government agency, or industry partner is already engaging with the startup, it suggests the product solves a real problem.

Of course, founder quality remains the most important factor. We assess whether the founders have the ability to build a team, scale the organisation, and execute over time. The presence of early customer conversations strengthens the case, but it comes after evaluating the founders themselves.

YS: What kind of founders tend to succeed in deeptech?

MKG: We don’t look for specific external credentials like being an academic or international experience. Those are outcomes of their experience, not the defining factor.

What matters more are intrinsic qualities: ambition, depth of expertise, and conviction. Why are they building in that particular space? Do they have the authority and understanding required? Have they spent meaningful time in the industry?

Deeptech journeys are long and difficult. Founders need resilience and staying power. Founder personality is critical because it shapes company culture. We have backed founders without traditional credentials, including college dropouts, because they demonstrated the right mindset and capability.

YS: How has Inflexor’s investment stage evolved across funds?

MKG: In our first fund in 2015, we invested at the seed and pre-Series A stage. At that time, seed rounds were small, often just Rs 2 crore–3 crore.

In our second fund, we moved slightly later and focused more on pre-Series A and Series A, with greater emphasis on early revenue visibility.

In our upcoming fund, which will be around Rs 1,200 crore, we will primarily invest at the pre-Series A and Series A stages. We want to see companies with a working product and some commercial traction.

YS: How has Inflexor evolved as a fund over time?

MKG: Our first fund was Rs 75 crore. We intentionally kept it small to test our thesis around investing in technology-led companies, at a time when the ecosystem was largely focused on consumer internet.

That fund invested in 12 companies and delivered about 3.2x returns, with an IRR (internal rate of return) of roughly 27–28%.

Our second fund was Rs 600 crore. This allowed us to invest in more companies and also provide follow-on capital. Across Fund I and Fund II, we have built a portfolio of 27 companies.

We are now raising our third fund of around Rs 1,200 crore, which will allow us to continue supporting companies leveraging science engineering and tech at scale.

YS: Where does India have an edge in deeptech today?

MKG: India’s biggest strength is talent, particularly our ability to apply fundamental technologies to real-world problems.

For example, foundational AI models may originate in the US or China, but India excels at applying these technologies to practical use cases.

We also have an advantage in frugal innovation. One of our portfolio companies, NoPo Nanotechnologies, produces single-wall carbon nanotubes. There is only one other company globally capable of producing this material at scale, based in Russia. Yet NoPo has achieved this with significantly lower capital investment.

India’s ability to build advanced technologies efficiently is a major advantage.

YS: Where does India still need to improve?

MKG: Fundamental research is an area where we need continued investment. The government has started taking steps in this direction, through initiatives in semiconductors, space, and research funding.

India is reaching a stage where it can meaningfully invest in deeptech research, and this will strengthen the ecosystem over time.

YS: How will initiatives like the government’s Deeptech Fund of Funds change the ecosystem?

MKG: The availability of larger pools of capital will enable the creation of larger deeptech-focused funds.

Deeptech companies require more capital and longer timelines. Series B and Series C funding rounds are particularly important. Larger funds will allow investors to support companies through these stages.

The impact will compound over time. Over the next decade, we expect to see more globally significant deeptech companies emerging from India.

YS: How ready are Indian customers to adopt deeptech products?

MKG: Acceptance is improving steadily. Government programmes like iDEX have helped accelerate adoption in defence and space. These programmes allow startups to secure contracts based on innovation.

Private sector adoption is also increasing. Large Indian companies are actively engaging with deeptech startups and testing new materials and technologies in their production processes.

As more startups succeed, industry acceptance will continue to grow.

YS: What does success look like for an Indian deeptech startup?

MKG: Success involves building globally competitive products and serving international customers.

We want our portfolio companies to generate meaningful revenues, attract global investors, and achieve strong valuations.

From a founder’s perspective, success also means seeing their technology adopted globally across industries.

YS: Are Indian deeptech startups building for global markets by default?

MKG: Deeptech markets are inherently global because the applications are global.

That said, most startups begin with India as their beachhead market. They establish credibility locally before expanding to international markets.

Over time, a significant share of their revenue often comes from global markets. In many cases, projections suggest that 75% of revenue could eventually come from international customers.

YS: Which deeptech areas are you most excited about?

MKG: Space technology is a major opportunity. India has strong engineering talent, and government support is improving. Indian startups can build globally competitive space technologies at lower costs.

Medical devices is another exciting sector. We are seeing innovation in areas like AI-powered diagnostic tools, robotics, and automated biopsy analysis. These technologies have both domestic and global applications.

YS: If you were starting Inflexor today, what would you do differently?

MKG: Honestly, I would not do anything differently. Our approach of investing in science-, engineering- and technology-led companies continues to work well.

What we remain focused on is identifying technologies that will shape the next decade. Our goal is to back companies that can create meaningful global impact over the long term.