The slowdown of funding in the startup ecosystem is a short-term headwind, will clear out with financial cycles, said Rajeev Chandrasekhar, Union Minister of State for Electronics & IT, and Union Minister of State for Skill Development & Entrepreneurship, at the 14th edition of TechSparks in Bengaluru.
In a fireside chat with YourStory Founder and CEO Shradha Sharma, Chandrasekhar said, “You can see this as certainly a pause. It’s not a full stop. It’s not a permanent reversal of the play. It is not a slowdown or a medium-term roadblock, rather it is just something that’s interim.”
He further explained that the ongoing slowdown of equity financing is a product of the post-COVID hyperstimulus in Europe and the US during early 2021, coupled with the full-blown war between Russia and Ukraine. He said the war, along with the inflation caused by the war, which broke out during 2022, has put pressure on the global economy, which was recovering post COVID.
The minister also revealed that the government is working on a digital fund akin to the National Infrastructure India Fund (NIIF) to support Indian digital businesses along with other domestic venture capital investors.
“I don’t think the idea is to replace the big-ticket investors like SoftBank, but we’re confident that the interest will be back when the cycles go back up or when the warn in Europe ends,” he said.
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