“Look at the vibe, look at the sentiment here in India,” said Prashanth Prakash, partner at Accel India. “Things are not all rosy but the context in which some of these challenges are playing out in India gives us a little bit more of a positive edge… It is for the first time that people are seeing this uncoupled kind of situation between the global startup ecosystem and what is happening here.”
Prashanth Prakash, partner, Accel India
The most positive sentiment of the night came from Union cabinet minister Piyush Goyal. “I have absolutely no doubt that these tough times the world is facing are an opportunity we should not miss,” he said. Goyal pointed out lessons for startups from the recent Kannada movie Kantara that’s a runaway hit: How it was made on a tight budget, had clarity in thought, and was connected to the masses.
Several industry leaders alluded to the fact that the worst may be yet to come.
“We haven’t seen the pain yet,” said Anand Lunia, founding partner at India Quotient. “A lot of money was raised last year and companies haven’t yet run out of money. People will try to raise money next year but most will likely not succeed in raising funds. So yeah, I think I’ve been saying this –we’ll have a lot of unicorns but they’ll be zombie unicorns. This means that they will be unicorns because somebody valued them as a unicorn but after that you never raise money.”
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Some were more optimistic than others.
“This has been a coming of age for Indian startups,” said Vani Kola, managing director at Kalaari Capital. “There has been a disproportionate focus on the shortcomings–it’s not all bad.”
Klaas Oskam, managing director and India head, DC Advisory, echoed this.
“There are two sentiments–there’s the global sentiment and there’s the India sentiment,” he said. “I think the global sentiment is, of course, pretty sober. Recession is already happening in Europe and is on the cards. And I think, globally, this is going to be a longer funding winter than some of the previous quarters. India and the Middle East are the two bright spots. Everyone needs to focus on unit economics. We’ll also see in India, a bunch of them having to hunker down. So interesting times ahead.”