The anti-survivorship-bias-reinforcing post. Thanks

Software Engineer

https://www.moneycontrol.com/news/technology/fromgomechanictozestmoneywhythousandsofstartupsshutdownin202311953691.html

Welcome to Indian Startups's Private Community

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

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- Grapevine

How many Indian startups shutdown from the beginning of 2024.

Journalist

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?

Product Manager

The data is from Carta and mostly North American companies.

50% increase in startup closures

Consultant

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

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

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

Startup shutdowns

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

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?

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 ?

Zombie startups - Startups that have messed it up already. They are alive but just biting their time. Doom is inevitable for these startups in a few months

I will name a few

Sharechat
Khatabook
Apna
Zepto
Dealshare
Frontrow
Udaan

Please name more. It will help our brothers and sisters to avoid these startups as employers

What are zombie startups in India right now?

Picture speaks a thousand words

Welcome to Gadgets & Apps's Private Community

Commercial, off the shelf drones continue to evolve in complexity and threaten military and civilian safety & disrupt operations. Anduril's counter drone sys...

Anduril Lattice Counter Drone System

Do we’ve Indian companies building something similar?

Software Developer

I'm seeing so many posts where startup employees are cribbing about things like layoffs, work culture etc etc. Doesn't seem like they have perspective on everything it takes to build a startup. I've built a failed startup myself and have immense respect for founders who are grinding it out there in such difficult recessionary circumstances. 

And then you have so many of the engineers and PMs cribbing about basics without talking about important things like learning growth, building for the future etc. Why such myopia? I work at a big tech and envy the speed at which startups move, the big responsibility everyone gets to handle, the fast career growth. All these things are being cribbed about. They crib about founders wanting more. Their job is to ensure success, not to give lifetime jobs to entitled people. They have more headaches you can imagine. In my small startup I had a million headaches. I can only imagine how hard it must be to run larger ships. Is everyone joining a startup these days looking for a get rich quick scheme?

Why are startup folks so entitled?

If you can’t run a business that lets people have a normal life then you’re the one who thinks they’re entitled to employees. 
 Businesses must take risk, employees don’t. Stop your whining that people won’t support shitty business plans

Growth Manager

When the market will stable , when this layoff period will go away ? Any thought 🤔

When this layoffs time will go away .

Year is ending in another 1 month.
A rough year for many startups winding off
Which startups do you think will wind off in next, 6 months?
Which startup should be saved and get VC fundings for continuing operations as Dhandha mode

Belly up startups

Founder

-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

As long as  EBITDA positive and profitable then company will survive! 


Unit economics needs to be focused! 

#newnormal #startups

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