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How many Indian startups shutdown from the beginning of 2024.

Journalist

How many Indian startups shutdown from the beginning of 2024.- Grapevine

https://www.moneycontrol.com/news/technology/from-gomechanic-to-zestmoney-why-thousands-of-startups-shutdown-in-2023-11953691.html

number of deadpooled startups, or companies in India that shutdown or were pushed to the brink of a shutdown, stood at 34,848 in 2023

Software Engineer

Heard from most people that there’s a lot of crunch. Wondering if anyone at their companies feels like their startup is growing despite the slowdown. 

Razorpay, CRED, and are seeing tighter regulations and downrounds. The food delivery companies have all gone through their down rounds and readjustment of expectations. Even SaaS most founders have a poor revenue/employee ratio and the india story is still yet to play out for the newer bets. 

Just yesterday Oslash announced it’s shutting down its app.

Any green shoots ☘️? And if there are maybe it’s a good thread for folks to try and hire.

Any Indian startups doing well currently ?

Product Manager

A lot of our lack of optimism comes from the above. 1/4th the funding in 2023 vs 2021!

We really have seen such a big nosedive from 2021 to 2023. Just the sheer numbers here!

Product Marketing Manager

The data is from Carta and mostly North American companies.

50% increase in startup closures

Consultant

many companies are shutting down especially the named ones. many are close to getting shut. is there a good resource to track? want to keep it handy for future purposes. :)

which companies have shut shop in 2023 till now?

There’s now a list of 4-6 startups that have shut down and announced closure in December. Why is this happening

Why are so many startups shutting shop in December?

Business Development Manager

Lets collate a list. I will start with a few guesses.
1. Bounce
2. Zepto
3. Sharechat
4. Dealshare

please add - lets collate a list and analyse again in 18 months.

What all large startups will shut down (fold) over the next 18 months?

-Online brands are expanding offline to achieve scale
 -Late stage startups are gearing towards profitability earlier than planned 
-Biz models built on behavior during Covid are struggling (like edtech) 
-Startups which got funded due to TikTok ban are struggling 
-Finfluencers are soon expected to struggle
 -Credit Fintech w/o NBFC license is a struggle
 -Very few consumer content startups frm India are seeing scale and profitability
 -RMG is struggling due to regulations
 -India focused creator economy startups finding it difficult to scale 
-PLG led Indian SaaS startups not able to cross $20M ARR
 -Some VCs finding it tough to raise without DPI 
-Public markets thrashing innovative/vanity metrics of pvt VC funded cos. and their pvt market valuations 
-Series B and beyond is tough, down round/flat round is now common
 - Deals happening at single digit ARR multiple for SaaS valuations 
- Web3 startups not getting funded 
- Most GenAI startups not able to build any defensibility
- Most B2B Commerce startups are not able to increase gross margins or reduce NWC
 - CACs are ever increasing 
- Compliance issues at many startups - Layoffs to continue 
- startups which got funded in 2021, will soon be out of runway
 - no liquidity event for vested ESOPs in most Indian startups
 - secondaries happening at 35% discount in some cases 
- deal closure times have become 2x - less FOMO amongst VCs 
- More instances of M&A falling through

Harsh realities of Indian startup ecosystem

https://inc42.com/features/indian-startup-fy23-financials-tracker-tracking-the-financial-performance-of-top-startups/amp/

The FY23 Financials Of Indian Startups

Been spending way too much time on Grapevine lately - absolutely loving it @Micheal_Scott!

Posted the Prosus report takeaways yday - lots of you DMed asking questions. Then I saw NewsAnchor break down the entire Prosus Annual Report - great stuff.

I was an Associate at one of the largest VC funds in India, so I enjoy going through new reports and summarising them - found my notes from Bain's India Venture Capital Report 2024. Thought of sharing the unedited summary that I shared with the Partners at the fund, have a bunch of these - can share more if of value to any of you here (ofc removing the confidential parts)

Notes:
1/ India's maintaining its gravitational pull despite the global funding crunch. Sure, overall funding nosedived 63% to $9.6B, but we're still the #2 destination in Asia-Pacific. Might not necessarily be a crash, it's a necessary course correction.
2/ Early-stage investing is showing remarkable resilience. Seed deals now comprise 70% of all deals, up from 60%, with average check sizes holding steady at $1.4M. Smart money is quietly positioning itself for the next wave of innovation.
3/ The tech-only playbook is being rewritten. While consumer tech, fintech, and SaaS still command 60% of funding, traditional sectors like BFSI are gaining ground, with average deal sizes jumping from $8M to $15M. We're witnessing the birth of tech-enabled, not just tech-centric, growth stories.
4/ The unicorn factory has hit pause, with only 2 new billion-dollar valuations vs. 23 in 2022. Mega-rounds ($100M+) plummeted from 48 to 15. This isn't a drought; it's a return to fundamentals. The era of grow-now-profit-later is firmly behind us.
5/ Generative AI isn't just hype; it's reshaping the landscape. Funding exploded from $15M to $250M, with 80% flowing to existing companies integrating AI. India's quickly becoming a laboratory for practical AI applications, not just speculative moonshots.
6/ Electric mobility is rewiring itself. While overall funding dipped slightly to $600M+, charging infrastructure investment surged 50%. The real opportunity isn't just in vehicles; it's in building out the entire EV ecosystem.
7/ Exits are defying gravity, leaping 1.7x to $6.6B. Public market sales led the charge at 55%, even as IPOs cooled. LPs are getting liquidity, and the secondary market is proving surprisingly robust. There's still appetite for quality assets.
8/ PE is no longer just watching from the sidelines. These players doubled their share to 25% of investments, going toe-to-toe with traditional VCs. The lines between growth equity and venture capital are blurring, and it's changing the game for late-stage rounds.
9/ We're watching natural selection in real-time. Yes, 35,000+ startups shuttered and 20,000+ layoffs hit the headlines. But companies like Groww and Indifi turned profitable. This isn't a bubble bursting; it's an ecosystem strengthening its foundations.
10/ Domestic VCs are coming of age. While overall fund-raising halved to $4B, homegrown VCs led 90%+ of raises. They're not just following; they're specializing, with thematic funds like Omnivore's $150M agritech vehicle. The ecosystem is bootstrapping its own future.
11/ Regulation isn't just tightening; it's evolving. Angel Tax expanded and lending norms got stricter, but we're also seeing innovative policies like UPI for foreign travelers. India's crafting a uniquely balanced approach to fostering innovation while maintaining stability.

Topics we can discuss during our standup:
1/ Can India produce global tech giants if it's primarily adopting rather than pioneering in areas like AI? How do we enable this?
2/ How will the shift towards profitability impact India's ability to foster truly disruptive innovations? Implications for us, how should we be evaluating deals differently?
3/ With domestic VCs leading the charge, how will this change India's startup narrative on the global stage?
4/ Is this maturation setting the stage for more resilient, globally competitive Indian startups, or are we risking our innovation edge? How do we look at thesis driven investing v/s fomo investing?

Link to Bain's report - https://www.bain.com/insights/india-venture-capital-report-2024/

P.S. Do note that this is 6+ months old - data points mostly look diff now but sharing it anyways. Will post more as and when I get time :)

My notes on Bain's 2024 VC report as a VC Associate

Investor

Like layoffs.fyi, is there any website that tracks startups that shut down on a monthly basis?

Startup shutdowns

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- The rise in market cap of companies like Zomato, Policybazaar, and MamaEarth has paved a promising path for Indian startups aiming to go public.
- Zomato co-founder Deepinder Goyal recently joined the billionaire club as his company's market cap crossed Rs 2,00,000 crore ($24 billion).
- Nykaa’s Falguni Nayar and her family hold over 50% of the company, with a collective worth of over $3.25 billion.
- Veteran entrepreneur Sanjeev Bikhchandani's shares via Info Edge are valued at $3.24 billion, making him a significant player.
- Despite challenges, founders like Paytm’s Vijay Shekhar Sharma and PolicyBazaar’s Alok Bansal continue to hold substantial stock values, highlighting the lucrative potential of Indian startups. 

 Source: Entrackr - tinyurl.com/2do9kuy3

Indian Startup Founders Reap Billion-Dollar Fortunes

Which Indian Startups are doing good in 2024?

Software Developer

I'm talking about new startups, as a founder who's trying to build an ecommerce platform currently.

I'm still very early, but it feels that the writing is on the wall. 
Flipkart, Myntra, Nykaa, Zomato, Swiggy etc. have all built great products and soon great businesses (I'm sure) 

But it does not make sense to me why we've barely seen anything new in the last 5 years. Even funding wise, if that is something one wants to look at. 

So many people have tried - none of the new ideas have worked. CAC is too high. Current platforms already solve problems. Retention is never there, people may try you out, but will move back to Amazon/Instamart. 

But this is not how things typically work. It's very clear that consumer spending is going to increase, online more so, at an even faster rate. I don't feel the current platforms solve everything, a better version can be built. 

SO, is it the founders of the current era that have failed to make a dent? Is it the fact that VCs have stopped paying attention to this space? Or is it that the current platforms indeed solve everything? 

Would love everybody's thoughts. And also if you have tried building/or have ideas on what potential next eCommerce platforms could loook like. 

Over and out.

Is Indian eCommerce dead? (from a new startup founders' pov)

Data Scientist

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Budget 2024 scrapped the angel tax for all investors, creating the ultimate playground for innovation and entrepreneurship in India.

Big news for Indian startups!

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