Indian start-ups have been experiencing a prolonged spell of funding winter. According to data shared by market research platform Tracxn Technology, in the first quarter of 2023, Indian startups raised $2.8 billion which is a 75 per cent decline from the Q1 of 2022.
Sharing his views on this trend which has been in discussion for sometime now, Dr Aravind Chinchure, Chief Executive Office of Deshpande Startups believes that this is a result of global economic situations and a shift in the perspective of the investors.
“VCs don’t want to be in the money-pumping race anymore,” he tells Business Today. He also adds that the venture capitalist community is now focused on “investing in the right idea” after carrying out the “due diligence processes.”
Deshpande Startups is a Hubballi-based incubator. In its latest cohort, 15 start-ups graduated from Deshpande’s incubation program.
Chinchure says that this is a result of multiple factors including economic situation in every corner of the globe including inflation, recession, among other things.
He also believes that the current turn of events within the start-up ecosystem are also because entrepreneurs were unable to manage the pressures of scaling a start-up beyond a point.
“Start-up founders miscalculated growth numbers. They were acquiring customers at a particular rate and they thought this rate would persist. With proliferation of data, and use of the internet they believed they would be able to acquire more customers. However, growth reached a saturation point which no one had anticipated,” he told BT.
This also resulted in mass layoffs across start-ups and even tech behemoths such as Google and Amazon.
Chinchure also highlighted that larger role of technology in the coming times.
The chatter around ChatGPT, artificial intelligence, and robotics has grown substantially in the last few months. However, the academician believes that the use of technologies will impact the job market as well.
“With chatgpt and Generative AI coming in, jobs will get impacted because organisations are extremely competitive and they want to integrate these technologies. If a company has hired 1,000 people to complete a task, and by deploying technology 100 people are able to do it, then the layoffs of the rest is bound to happen,” he notes.
“You need to eventually create an enterprise that generates revenue and makes profits,” he said before concluding.
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