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News update
- as ifStart Story | March 18, 2023
Rajan Anandan, managing director of Sequoia India, said that due to the liquidity crisis in the private equity market, a large number of Indian unicorns should become profitable in the next 18-24 months. Many unicorns are currently unprofitable, but that is expected to change dramatically in the next two years, Anandan said at the inaugural meeting of TieCon 2023 in Delhi. He also said that the level of profitability achieved by these companies is surprising.
Sequoia India Managing Director Rajan Anandan said that for an IPO in the current market, companies should have single-digit EBITDA and share-based compensation should be reasonable. He added that by 2021-2022, startups have raised a large amount of capital, creating enough runway for them to achieve profitability in the next 4-5 years. Anandan opined that the practice of tech startups giving discounts to attract more customers has stopped.
The Covid-19 pandemic has accelerated digital adoption in India, resulting in Indian startups in 2018. It raised over $35 billion in venture capital funding by 2021. This is a significant increase from the $14 billion raised in 2019 and $10 billion in 2020. According to Rajan Anandan, Venture capital raised by Indian startups is estimated to be between $2-2.5 billion in the first quarter of the year.
Anandan said that funding for Indian startups is expected to return to the trend line of between $10-15 billion this year, which is the same as in 2016. He said it was a significant increase compared to the less than $1 billion raised in 2010. It has reduced funding and reduced the value of technology companies. Anandan added that 2021 saw euphoria across all asset classes, resulting in a $10 billion run rate.
Molbio Diagnostics has achieved unicorn status by raising $85 million at a valuation of $1.53 billion in September 2022, according to data from Venture Intelligence. According to the Tech Startup Conclave on March 17, early stage funding activity is back on track, and deep tech and hardtech startups are getting more interest in venture capital investments. According to Anandan, estimates for the first phase of space are down from their 2021 highs, which were still less than $1 billion in 2010.
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