THE STARTUP ECOSYSTEM is witnessing an uptick in mergers and acquisitions after a surge in large-scale exits through initial public offerings (IPOs). The funding crunch being experienced by the startup community coincides with the economic slowdown and uncertainty that most economies are going through now. The mood within the venture capital (VC) and private equity (PE) fraternity is conservative.
Will home-grown Indian VCs be able to step up and fill the void of flight of capital toward a stronger reserve currency, the dollar? Home market players feel they do not have parity with international capital because approvals are comparatively slow, capital raising is highly challenging and higher constraints on overseas investments. While the overall sentiment remains positive, monetary policy tightening continues to remain a sensitive point affecting capital flows into India. According to a latest PwC report, the total funding in Indian startups dropped by 60 per cent in the second quarter of the 2021-2022 financial year (Q2 FY 2022). A number of startups such as Ola, Snapdeal and Pharmacy have delayed their IPOs because of the "funding winter".
A new crop of domestic investors are, however, on the prowl. These are India-focused investors and specialised theme-run funds. "We can't be competitive as a domestic VC industry unless we can avail of the same benefits in our home market as international investors can. It's far easier today to be an FDI investor than a domestic investor. We should ensure that this becomes a level playing field as well," says Karthik Reddy, Chairperson of the Executive Committee of the Indian Venture and Alternate Capital Association (IVCA).
This story is from the 30 July 2022 edition of Businessworld India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the 30 July 2022 edition of Businessworld India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
MEMORIES & IMPRESSIONS
Ratan Tata was an exceptional human being. He was a visionary leader, esteemed industrialist, and a humanitarian, who left an indelible mark on India and the world.
The Robotaxi Market
The robotaxi market is shaping up to be a high-stakes battleground as tech giants and automakers race to transform urban mobility.
And the Nobel Prize Goes to AI
The recent Nobel Prize T awards to AI pioneers affiliated with Google have sparked a broader conversation about Big Tech's influence on research and the limitations of traditional prize categories.
Ola Electrified
Once considered a trailblazer in India’s electric vehicle (EV) ecosystem, Bhavish Aggarwal’s Ola Electric now faces a major accountability crisis.
Sharp Slide in Industrial Output on Eve of Deepavali
India’s index of industrial production (IIP) saw a sharp reversal in August, contracting by 0.1 per cent, in stark contrast to the 4.7 per cent growth in July, mostly because of significant contractions in mining and electricity generation.
Heralding the Solar Era with Sustainable Electrification
RAJEEV KASHYAP on the economics of solar power, the hurdles in scaling it, and much more
A WELL-GREASED MACHINE
The OmniBook X14 laptop runs on first-generation Snapdragon X Elite, which bets big on Al-enabled productivity and battery life, but falls short when it comes to overall experience, says Deep Majumdar
DO NOT LETA HEALTH CRISIS RUIN YOUR FINANCIAL HEALTH
For a family of four living in a metro, it is recommended to opt for a family floater health insurance plan with a sum insured of at least Rs 15-20 lakh
Disruption Ahead: Beyond Organisation Charts and Structures
ALBERT EINSTEIN FAMOUSLY said, “We cannot solve our problems with the same thinking we used when we created them.
Dr. Rahul Shivajirao Kadam: A Visionary Leader Blending Sustainability, Innovation, And Social Empowerment
We are on the stage of global warming, and these technologies not only help prevent further damage but also leave behind a better environment for future generations.
