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BW Businessworld

Investment Scenario Uncertain In 2017, Say Investors

In a post-budget roundtable organised by BW Businessworld in Bengaluru, investors and industry experts got together to discuss the Union Budget 2017

Photo Credit : Bivas Banerjee

Investors and industry experts discussed and dissected the Union Budget 2017 in a post-budget roundtable organised by BW Businessworld in Bengaluru on Friday (February 3). The panellists included Giridhar Nagraja, CEO of Sakha Global; Shashishekhar Chaugule, Partner at Walker Chandiok & Co; Subramanya S.V., co-founder & CEO, Fisdom; Naganand Doraswamy, founder & managing partner at Ideaspring Capital; and Vikram K. Limsay, CEO, Helicon Consulting.

The power panel was moderated by Ayushman Baruah, Associate Editor, BW Businessworld who set the stage by talking about the startup ecosystem in India and the change in investment trends.

Referring to the Startup India initiatives by Narendra Modi, Naganand Doraswamy of Ideaspring Capital said the government already dedicated a lot to startups last year. “So, nothing much was expected out of the budget this year.”

The panellists agreed that the trends in investments have changed with companies now being forced to focus on profitability rather than scale. This is in the context that despite heavy investments, Indian startups have not been able to break even. Valuations of some of the unicorns are being marked down. For example, Flipkart’s valuation has been cut to $5.5 billion from $9 billion last quarter and $15 billion in July 2015.

The experts also viewed demonetisation as a positive move in the long-term provided some of the obstacles are overcome. “The time and cost of digital payments must come down,” said Subramanya S.V. of Fisdom.
Giridhar Nagraja of Sakha Global said that both investors and startups were not mature enough earlier as a result of which investors pumped in too much money and startups burnt out too fast.

The panel was unanimous that the funding ecosystem is undergoing a correction. While meritorious startups will continue to attract investments, they will have to undergo a much stringent evaluation process now.