Startup valuations_ what 2017 looks like for start-up valuations, technology news, ettech
Although plenty of bright ideas and big dreams were founded and funded between 2012 and 2015, just a handful of those sparks really caught flame, and fewer still survived beyond a few flickers.
As caution (and common sense) began to question the business and revenue models that India’s biggest tech-startups were banking on, investors shifted focus from scalability to profitability.
The ecosystem was at a very nascent stage, with limited investment opportunities. New innovations in automotive technology As large pools of both domestic and international investors vied for a stake in India’s massive market potential, their zeal to bag the first and the best resulted in a deluge of investment capital — especially in the consumer tech segment —spurring sky-high valuations.
In a market where your customer’s loyalty is about as steadfast as your discounts are deep, undercutting the competition through cut-throat price wars in order to swell user-base/GMVs meant Indian tech startups were burning through capital faster than ever before.
The ploy worked though, drawing in droves of customers, sale after sale. New innovations in world Supporting this trend were unimaginable peak valuations of prominent young Indian startups.
Investors viewed this with delirious optimism, and more bought into such opportunities, even at unrealistic valuations. New innovations in technology 2011 Funding activity and VC deals in India boomed amid rising valuations leading up to 2015.
The realisation dawned that discount-led user-base/GMV based models – with no clear visibility of profits — are unviable. New technological innovations 2015 Mushrooming new tech and service startups helped check the imbalance as well, and the congestion gradually curtailed the trend of lucrative valuation terms.
Consequently, founders were under pressure to build sustainable revenue models that could deliver real profits. New innovations in technology 2015 Heavily funded tech-startups like Flipkart and Zomato bore the brunt of investor ire, and were devalued. Ttuhsc new innovations These were the first of many tremors in the Indian startup ecosystem.
Snapdeal and Ola faced difficulties in raising funds at their preferred valuations. New innovations gme login Plenty of start-ups like Housing, Urbanspoon, Zipdia, TownRush, and SpoonJoy were sold off to stay afloat, while others like PepperTap, AskMe, TinyOwl, and Dazo simply shut shop.
Things are turbulent over the fence too. New innovations in battery technology Devaluations and slowdowns have hit startups overseas as well, with unicorns like Snapchat, Dropbox, Zenefts, Coudera and Docusign weathering markdowns (in the range of 20-50%) from existing investors due to uncertainty over sound revenue models.
With investors turning cautious, the adverse impact on funding landscape was visible. New innovations in communication technology 2016 saw a decline in funding activity, with lower pre-money valuations in India for VC stage deals.
India’s start-up ecosystem is in for an overhaul. New technical innovations Devaluations and a funding crunch would force startup leadership to bridge gaps in their business models, explore sustainable revenue streams, and make strategic adjustments.
The recent Flipkart and Zomato devaluations may also have a domino effect on other tech startups, resulting in further market correction. New and innovative business ideas Businesses that don’t have sound business models would see sizable corrections in value.
The days of “me too” mimics may also be numbered. Ir new technology innovations ltd With market confidence sliding and investors getting more finicky with every passing day about what they’re sinking their money into, raising follow-on funding will become more difficult.
Competition is likely to intensify — especially from global players with deeper pockets — and may further stymy Indian players. New innovation technology in india There’s going to be a dire need for differentiation and innovation.
With an increasing shortage of funds, tech-startups will have to reorient themselves to profitable unit economics. New science innovations Discounts and freebies may soon become a thing of the past as well.
Snapdeal has already announced shift of focus from GMV to net revenues, and other businesses are expected to follow suit. New innovation in electronics technology We may also see a steeper wave of consolidation in the tech startup space, where forces would combine to explore synergies, fight the tight market conditions, and improve survivability.
Consolidation, in fact, is already afoot aplenty. New innovations in information technology 2013 In the recent past, PropTiger acquired Makaan & Housing.com, Snapdeal acquired Freecharge, Ola acquired TaxiForSure, Zomato acquired UrbanSpoon, and Grofers acquired Spoonjoy, Townrush, and My Green Box.
A few other sectors such as B2B, Artificial Intelligence, and SaaS are also expected to remain resilient as budding innovations and burgeoning market potential will support these businesses’ future prospects.
There are also host of startups focused on solving social and community problems, using innovative technologies in health-care, education, social platforms, hyper local services and analytics, all areas with both a “feel-good” factor and the resilience to weather recessions that’ll make investors more amicable while signing cheques.
Nasscom numbers suggest that in 2014, India boasted the world’s third-largest collection of established startups, with 3100 companies already running and more than 11,500 expected to become operational by 2020.
Established businesses are also maturing, and investors are optimistic about the market’s pulse. Lsu new innovations 2017 will be a year when innovations are rewarded while the (“me-too”) apes go extinct. New innovations in it technology Businesses and investors alike are regaining their sensibilities.