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In the yesteryears, SEBI rules required an IPO-aspirant to be profit-making for at least three years before it took the primary market route and onboarded a broader set of investors. But, for the longest time, ‘profitability’ was sort of a daydream for VC-backed startups.
However, promoters, VC-backers, and IPO investors are showing a much higher degree of maturity in embracing problem-solving solutions, taking long-term calls instead.
Zomato’s killing opening on the bourses in July is a strong point in case. And what has followed is a flurry of IPO-aiming activity by the Indian startups — Nykaa, Policybazaar, MobiKwik, Tracxn, Delhivery, CarTrade, and Paytm. Another notable mention is Freshworks, but the SaaS giant has listed in the US.
For the startup ecosystem, the current flurry of IPOs has a strong cascading effect as the early investors get a good exit, which can be redeployed in the next round of promising startups.
The market is also seeing a new class of investors. A Paytm Money study revealed that 27 percent of those who applied for Zomato shares on its platform on Day 1 of the IPO were under the age of 25 while 60 percent were under 30 years of age.
Moreover, the number of demat accounts, which stood a little over 2.34 crore in April 2015, grew over 2.76 times to nearly 6.49 crore at the end of July 2021.
Given the phenomenal rise in the digitisation of financial services, and the sky-rocketed number of demat accounts, it would be a fair assumption that digitisation and proliferation of fintechs have brought in a lot of first-time investors in the market.
The Interview
Founded in 2016 as a solution to a personal problem by Varun and Ghazal Alagh, D2C personal care brand Mamaearth crossed an ARR of Rs 700 crore ($100 million) this April.
What started with a simple mission of providing natural and toxin-free products for baby skin, and help alleviate the stress of new parents is today on the path to becoming a ‘house of brands’.
Co-founder and COO Ghazal Alagh breaks down the brand’s remarkable journey in an interview with YS.
Editor’s Pick: Weddings post COVID-19
India is known worldwide for its ‘big fat weddings’. However, the COVID-19 pandemic cast a massive shadow on the wedding industry.
Prerana Agarwal Saxena, who started Theme Weavers Designs in 2008, believes that the Indian wedding industry is in the midst of an evolution and wedding planners must be prepared. Read more.
Prerana Agarwal Saxena, Founder, Theme Weavers Designs
Startup Spotlight
Using AR to help visualise décor
Founded in 2020 by Siddharth Chandrashekar, Pixel and Mortar is developing a platform that allows users to combine digital and physical, enabling a world where a trained interior designer creates mood boards to understand user preferences and then suggests furniture, rugs, wallpapers, lamps, furnishings, and more. Read more.
Illustration: YS Design
News & Updates
Before you go, stay inspired with…
“There is a constant fear of what if [something’s] not right. When we started, that fear was much less; we were more open to experimentation. With growth, the fear of failure also increases — the fear of not being innovative enough or fast enough when you look at the competition.”
— Ghazal Alagh, Co-founder and COO, Mamaearth
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