Funding winter has become the dominant theme for the startup ecosystem but the situation is perhaps an opportunity for venture capital firms to find resilient startups, panelists said at TechSparks 2022, the flagship event of YourStory.
Panelists, speaking on the topic-Investor speak: Funding amid global turmoil, opined that the funding winter isn’t a drastic event.
Anup Jain Managing Partner, Orios Venture Partners, an early-stage VC firm said, “Our investing style has not changed as we do not see any slowdown.”
He was of the opinion that conditions are favourable for Indian startups and that there is a greater domestic interest in these businesses.
However, there has been a slowdown in overall funding activity when compared to 2021 and this has bought some changes to the ecosystem. Rajiv Srivatsa Partner & Investor, Antler India, said, “This year we have people who are serious about building something credible and this a good thing.”
Echoing similar views, Ritu Verma, Co-founder, Ankur Capital, an early-stage VC firm, said the present environment is also good for entrepreneurs as they can build something that solves a customer problem rather than focussing on the next fundraise.
Although mature startups, who may require a higher amount of capital, have had to deal with funding slowdown. Sudhir Variyar MD & Deputy CEO, Multiples Alternate Asset Management said good entrepreneurs have shown their resilience in battling various challenges and this was evident in how they navigated through the COVID-19 lockdown period.
According to Rajiv, experienced founders understand the slowdown are part of the cycle and they will focus on building a sustainable company.
Sudhir said investors are unlikely to be mesmerised now by the growth projections shown by the founders and investors will look at businesses that are sustainable.
The present phase is also perhaps the best time to build businesses. “The number of opportunities to build for India is only going to increase,” Ritu said.
Added to this is the higher infusion of capital by domestic investors into startups, which was not the case a couple of years ago. Sudhir said, “The confidence of HNIs and family offices to invest in startups is far higher now.”
“We are in the best phase now and everyone who wants to be an entrepreneur should turn into one solving the large problems,” Anup added.
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