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BharatPe’s Grover and edtech startup Byju’s have been the two most high-profile instances where solo aggressive founders have been engaged in protracted litigation fighting shareholders, lenders and law enforcement agencies even as their startups have floundered.
Indian venture investors are shifting focus from tech startups to safe havens, including direct-to-consumer brands. The trend is towards larger fund sizes, profitability, and slower growth, resembling mid-market private equity. AI investments are lacking in India, leading VCs to diversify into offline spaces and PE territory.
A set of entrepreneurs of local internet companies are labelling Google's eviction of their apps from Play Store as hegemonic. People Group's Anupam Mittal said on X that Google's 30% commission structure was akin to a lagaan and compared the online search behemoth to the East India Company.
Two of the biggest names in the Indian startup world, Paytm's Vijay Shekhar Sharma and Byju's founder Byju Raveendran, face an existential challenge to their businesses. The recent challenges faced by these founders reflect the excesses of the hyper-funding period and highlight issues of governance, compliance, and transparency.
As San Francisco cleaned up to host world leaders at the Asia-Pacific Economic Cooperation (APEC) Week 2023, including the much-publicised meeting between US President Joe Biden and Chinese premier Xi Jingping, along with high-powered CEOs, the city’s reality couldn’t be further from the polished facade it is trying to present.
A few weeks ago, Tata group company Titan hogged the headlines when it bought 27% stake in CaratLane (Titan has been a strategic investor since 2016). A cash exit for an Indian consumer internet entrepreneur is rare, more so when it comes as the broader industry is struggling to get the fundamentals right, and funding from risk investors has fallen precipitously.
Loss-making startups taking on debt is a sure-shot recipe for disaster, said a founder who has seen several funding cycles. “In the era of easy money and low interest rates, investors and lenders drastically lowered the bar on asset quality as they were desperate to fill the hole in their P&L ( profit & loss). But lenders who burned their fingers will never come back to the product,” he said.
Over the past decade many venture-backed ecommerce startups have raised capital only to subsequently shut down, from Letsbuy and Urbantouch to Craftsvilla and Voonik. Others, such as Snapdeal and Shopclues, are also in the past, now. Amidst all this, let’s not forget the grand entry of the juggernaut that is Mukesh Ambani’s Reliance Industries. And the Tata group which has been making a push into the sector with Neu.
Welcome to the second edition of Full Stack, a place where you’ll find unfiltered commentary on all things technology.
What started eight months ago, with investors asking for profitability, tighter control on costs and unit economics, to layoffs and downsizing, has now turned into a full static mode for the past few months. To add to this, a bunch of companies have seen major corporate governance lapses, highlighting how the excesses of previous years are throwing up concerns about basic business fundamentals.
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