‘Never had a Funding Winter… Good Firms Always had Enough Money to Back Them’: Sanjeev Bikhchandani
Sanjeev Bikhchandani added that in the coming years, startups are expected to play a crucial role in making India a developed economy by 2047.
Sanjeev Bikhchandani, the Indian investment maestro behind Info Edge, which owns Naukri.com, has said that the Indian startup ecosystem has never faced a funding winter despite the financial challenges and funding slowdown.
Recently speaking at an event in Mumbai, Bikhchandani said: “There was never really a funding winter. There was a funding excess… Too much money chasing too few deals at too high valuations. I don’t think enough investors were discerning enough… Good companies always had enough money to back them. Right now, we are back to reasonable levels of funding.”
Bikhchandani’s comment came on the back of Indian startup funding hitting a seven-year low in 2023. Investments among fledgling firms fell 72 per cent year-on-year to $7 billion in 2023, compared to $25 billion in 2022, according to data from Tracxn.
Bikhchandani added that in the coming years, startups are expected to play a crucial role in making India a developed economy by 2047.
“In 1984, if you had asked me what will happen after 40 years, I would not have predicted this. If you ask me now, what will happen 40 years from now, I don’t know. But I can say that the change will be driven by the same forces that were responsible for the change in the last four decades,” Bikhchandani said drawing parallels between his startup journey and the years leading up to 2047.
He also added that the government is the single most important institution in the country which can bring about a change in the whole industry. He mentioned the pivotal role played by economic liberalisation in 1991, which unleashed opportunities across various sectors and fuelled the growth of startups.
He added that in the next few years, government regulations, technology, capital, entrepreneurship, and talent can play a big role in the world of startups.
In terms of funding and startups, PE/VC investments in India fell 11 per cent Y-o-Y in CY 2023, from a total of $56.1 billion across 1,273 deals in CY 2022 to $49.8 billion across 854 deals in CY 2023, primarily due to a 33 per cent drop in deal volume, according to the EY-IVCA report.
A recent report by Tracxn stated that funding winter in India’s tech startup ecosystem dragged between January- March 15 in 2024, with only $1.6 billion inflows — a 51% decline from the previous year. The tech startups received $3.2 billion of funding in the same period last year.
It noted that startups and private firms observed a 48% reduction in funding rounds at 222 in the first quarter of the current calendar year. Last year, 432 rounds of funding took place in the same period.
The funding to Indian tech startups was 4% of the total global funding ($37 billion) in the first quarter of 2024. The US tech startups received $19.5 billion in the same period.
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