At the Delhi-NCR chapter of the 2023 Economic Times Soonicorns Summit 2023 on November 3, senior leaders in the Indian startup ecosystem, industry stakeholders, investors and unicorn founders outlined a blueprint to chart a course towards profitability.
In his opening video address titled ‘ET Soonicorns Summit: Enabling the rise of a resilient startup ecosystem and tracking new frontiers of growth’, Satyan Gajwani, Vice Chairman of Times Internet, welcomed attendees, observing that this is the second year of the ET Soonicorns Summit, with this year marking the summit’s transition into a phygital avatar.
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Watch the full ET Soonicorns Summit 2023 here
How unicorns did it: Navigating the startup ecosystem
As a smog-choked Delhi morning unfolded, Gajwani pointed out that recent years have witnessed a funding winter, posing challenges for high-growth companies. Unlike the past characterised by easy access to capital and achieving fast growth at all costs, companies today must mature and demonstrate their strength, resilience, and independence. “This is healthy; it's good for us. It creates a challenge, but ultimately it will help us yield better, longer-lasting and more productive companies that will contribute to the overall economy,” said Gajwani. The Times Internet Vice Chairman set the tone for the event mentioning that the summit would prove to be informative and insightful, with unicorn founders taking attendees through the ups and downs of a startup journey and sharing valuable perspectives. “A number of existing unicorn founders are joining us today to teach us from their playbooks, to share with us how they've endured and navigated the challenges of their own journeys, going through their own struggles, moments of crisis, euphoria, fear, anxiety, and the many challenges that come as part of a startup journey from starting up to becoming a unicorn company one day in the future. I'm sure we will all learn from their guidance and expertise,” he added.
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Watch Satyan Gajwani’s opening video address here
ET SpecialJeet Vijay, CEO, MEITY Startup Hub, lauded the initiative of the ET Soonicorns Summit, stressing upon the need for a collaborative effort between the public and the private sectors to build an impactful ecosystem. “Today, we are the fifth-largest economy. In the last decade we went from the ninth-largest to the fifth-largest economy, and now we are discussing becoming the third-largest economy in the world in the next few years… This means we are larger than the economies of many developed countries… If we are the fifth-largest economy in the world, why are we still a developing nation? The reality is that hunger, health, poverty, education, unemployment, all these parameters are still affecting a large section of our population. Just because we are a large economy it does not mean we have delivered for everyone in our society; that’s the harsh reality,” said Vijay.
Against the backdrop of economic disparity, ideological diversity, cultural and linguistic richness, and topographic and geographical heterogeneity across India, the government aims to deliver services on the principles of accessibility, availability, and affordability. Vijay also emphasised how this necessitates that the government establish greater institutional integrity, ensuring uniform, compliant and transparent model of governance for all.
The subsequent keynote speaker, Geetika Dayal, Executive Director, TIE Delhi-NCR, echoed Vijay’s sentiments. “...The ET Soonicorns Summit 2023 turns out to be not just a celebration of entrepreneurship and what the spirit of entrepreneurs resides in the word ‘resilience’...but also the fact that is a great platform to get insights, get to know what’s happening as we just heard from our keynote speaker Jeet (Vijay) in terms of what the government is doing to enable this ecosystem,” said Dayal during her inaugural keynote address titled ‘India’s deeptech startup opportunity: Enabling the rise of Future Unicorns from Sunrise Sectors’.
What does the year of the reset herald for Indian startups? “Most startups became unicorns during the years 2020, 2021, and 2022. Why was that so? It was because of the pandemic, as the pandemic made us realise the power of digital technologies to provide accessibility and availability of resources and solutions to consumers, and as a result valuation shot up. The startup model went from value creation to that of valuation...” said Vijay in his inaugural keynote address titled ‘Startup20 Vision: Enabling Indian startups to become the engine for global economic growth’.
The startup model morphed into a political model, focused on bringing more consumers on the platform, disregarding customer acquisition expenses, negative EBITDA, and prioritising sheer numbers for a competitive advantage. However, simply acquiring customers isn’t enough to retain them; the product’s quality and value are critical. In the midst of the startup frenzy, the cost of customer acquisition and the value creation proposition were overlooked, and this is what prompted a ‘reset,’ Vijay explained, shedding light on how the summit explores the themes of margins, maximising returns from customers, and unit economics to drive future economic growth.
Meanwhile, Dayal also stressed that there is a greater impetus in building a collaborative ecosystem, with institutions such as TIE relying on deeptech startups for their ideas, passion and innovation. With India celebrating Chandrayan-3’s successful soft-landing on the moon, Dayal encouraged deeptech startup founders to identify the untapped opportunities and optimise their potential in further space exploration.
Through the investor’s lens: The path to profitability, the road to IPO and more
In a keynote panel titled ‘The Titan touch: Entrepreneurial prowess meets investor acumen,’ and moderated by Priyanka Sahay, Assistant Editor, ETPrime, Kunal Bahl, Co-founder of Titan Capital and Snapdeal, said, “I’ve never met a founder who said ‘I don’t want to be profitable.’ I think they have all wanted to be profitable, it’s just that the timelines kept getting pushed, sometimes because owing to capital, their ambitions, or a lack of discipline…I do agree that till FY ’22 a little bit of overspending was going on, while FY ’23 was the year when a lot of corrections have happened, and FY ’24 is the year of ‘results,’ when they come out about a year from now, you will start seeing probably the healthiest financials in our ecosystem.”
Echoing Bahl’s sentiments, co-panellist Rohit Bansal, also the Co-founder of Titan Capital and Snapdeal, emphasised that a non-negotiable aspect of becoming profitable is to get the unit economics correct right from the start. Attempting to correct unit economics dramatically at a later stage in the business’s life might demand a complete overhaul and pose an existential threat. Bahl added that the transformation of the quality of financials that the co-founders at Titan have been witnessing this year is incredible. “The number of companies that have become cash-generating machines is going to surprise us, wow us…” affirmed Bahl. Notably, with the initial public offering (IPO) of Honasa Consumer, the parent company of Indian personal care brand Mamaearth, both Bahl and Bansal are poised for remarkable returns.
In the panel discussion titled ‘Road to startup IPOs: Tracking financial and tech preparedness and strategies for success’ and moderated by Manu Toms, Executive Editor, ETPrime, panellists Rahul Taneja, Partner, LightSpeed India; Sumir Verma, Founder, Merisis Advisors; Jasbir S. Juneja, Partner, RedSeer Consulting; Vinay Bansal, Founder and CEO, Inflection Point Ventures; Akhil Gupta, Founder, NoBroker; and, Sudhir Rao, Senior Partner, Celesta Capital convened to discuss IPO-ready business models. According to a RedSeer report, India has about 100 companies that are either profitable or on their path to it. The ones that are on the path to profitability are expected to get there in about five years.
Commenting on whether the VC approach towards early-stage startups has undergone a shift given the shifting narrative towards profitability and sustainable growth, Rahul Taneja, Partner, LightSpeed India, said, “Over the course of the year, while markets move from one format to another, or one phase to another, I would say at the very essence, early-stage investing is a very simple trade which we often end up complicating. The simplest thing we have to look for is if the startup is building in a very large market and has potentially a very differentiated idea…. I think both investors and founders are much more cognizant of where the private capital markets are today and therefore they pace themselves accordingly.”
Delving into the learnings of the past two years, Sumir Verma, Founder, Merisis Advisors, emphasised that the issue is not about whether a company is profitable or not; in fact, it is only an issue because the market wants profitability. However, the market also wants to see growth. “In the early stages, when the company is raising money, all that matters is growth and getting the product market fit…but when it comes to the public markets they prefer a higher positive weightage to profitability,” added Verma.
Vinay Bansal, Founder and CEO, Inflection Point Ventures, agreed to disagree that the public markets’ demand of a higher level of transparency is what’s reinforcing discipline, with companies exhibiting remarkable improvement in financials and profitability. Offering a slightly different perspective, he stressed that the higher levels of scrutiny have ushered in a shift in the mindset, with founders now striving to move closer to profitability. However, the real essence lies in the operational discipline and understanding, which enables a startup to transition from an early stage to growth stage, according to Bansal.
Seconding Bansal, Akhil Gupta, Founder of NoBroker, emphasised that slow and steady wins the race; companies with a solid foundation are sustainable in the long run. This is what has also defined the playbook of the real estate unicorn right from the start, to establish the company as a trusted brand in the real estate market.
Playbooks for growth and scaling
“As a starting point, growth in my view is important for all companies because if you are growing it’s a signal that your consumer is finding value in our product…If your company is structured well then growth is your friend and not your foe in your profitability journey. All companies will have fixed costs and variable costs, and if you have structured your company well, your variable costs will be low, you will have a high cost margin, and consequently you will scale. You will be able to cover your fixed costs and eventually hit profitability and leverage heavy cash flows,” said Abhiraj Singh Bhal, Co-founder, Urban Company. Speaking at the closing Fireside titled ‘Amid startup reset: Not taking the foot off the growth pedal,’ Bhal laid out the golden rule of evaluating a startup: If the company is growing right along with being profitable, it is doing something right.
When HealthKart Plus (which is today 1MG) was launched in 2012 under the umbrella of HealthKart, little did Co-founder and CEO, Prashant Tandon, know that the health content platform serving as a database for medicines would go viral, and continue to command a life of its own. In 2021, Tata Digital, the subsidiary of Tata Sons, acquired a majority stake in the online pharmacy 1MG, which Tandon described as a “D2C brand before the birth of D2C,” with a patient-at-the-centre model at its heart. Speaking with moderator Digbijay Mishra, Deputy Editor at ETtech, as part of Fireside chat titled ‘The playbook to scale your startup with a strategic investor,’ Tandon said, “When the Tata Group came for the conversation, one thing became clear that the way the market structure was evolving a lot of large players would become important and all of these players have long-term strategic capital. So, we had two options, we either kept raising year after year, and kept playing the market as it came or we found whoever was the right partner for us. I always wondered why the Tata Group was not in the healthcare business given that they are by far India’s most trusted brand, and healthcare is a business which is built on trust. So, for me, it was very natural that a new-age model of a trusted healthcare brand was something that could happen through this association.”
From D2C to fintech, mapping startup opportunities across Bharat
The ET Soonicorns Summit 203 also deep dived into two specialised tracks that resonate with the startup ecosystem and its emergent areas of tech-led innovation, solving problems for underserved consumers of Bharat and beyond.
Pallavi Shrivastava, Co-founder of ProgCap; Swati Bhargava, Co-Founder of CashKaro and EarnKaro; Tushar Aggarwal, Founder and CEO of Stashfin; Manish Kumar, CEO & Founder of KredX, and Souparno Bagchi, COO of Balancehero India, delved on the topic ‘Future of money: Unlocking the $2.1 trillion fintech opportunity for Digital India,’ in a panel discussion moderated by Tarush Bhalla, Senior Assistant Editor at Economic Times. The speakers deliberated on how there’s no one ‘fintech’ sector given its sheer diversity from lending to small and medium enterprises, credit, cashback, financial services and instruments, evolving regulations, and the immense opportunities that lie ahead to realise financial inclusion and create awareness about financial products.
Continuing to delve on how startups from India can build for the world, a panel discussion on theme of ‘Cracking the omnichannel business model: Strategies for D2C startups to win and achieve global scale,’ featured Radhika Ghai, Founder of KindLife and Shopclues; Pawan Gupta, CEO and Co-Founder of Fashinza; Ankur Pahwa, Managing Partner at PeerCapital; Deepanshu Manchanda, Founder & CEO of ZappFresh; and Atul Mehta, COO of Shiprocket. Moderated by Priyanka Sahay, Assistant Editor at ETPrime, the panellists shared ground-up insights for direct-to-consumer (D2C) startups to leverage and scale, while prioritising meaningful value creation.
Last but not least, Priyanka Gill, Group Co-founder of Good Glamm Group, shared her insights how content serves as an organic medium to showcase and sell the right products, brand influencer fit, and maintaining an organic synergy yet distinctive voices for each of the diverse brands under the group. Speaking with Miloni Bhatt, Editor-Digital Broadcast, Economictimes.com, Gill unravelled the currency of content in today’s digital age, at the Fireside chat titled ‘Scale 2.0: How content and commerce at scale will power India's first global beauty company’.
The ET Soonicorns Summit 2023 was co-presented by Persistent - Google Cloud and had myBiz by Makemytrip as the Scaleup Enabler; Persistent - Google Maps as the Associate Partner; SAP India as the Technology Partner; Balancehero India as the Associate Partner; Tracxn as the Research Partner and Kimirica, Deciwood, Boat, Sleepy Owl, Beyond Snack and Jaggic as Gifting Partners.
Watch the full ET Soonicorns Summit 2023 here
For more information on the ET Soonicorns Summit 2023, visit our website.
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