9.1 C
New Delhi
Saturday, December 14, 2024
HomeTechStartup funding woes may hurt IPL ad prospects

Startup funding woes may hurt IPL ad prospects


Mumbai: The funding tap is running dry at startups, and one major casualty of this could be the Indian League (IPL).


Each month, inflows are trending lower for startups in India, just as it is across the world.

Inbound investments were $4.6 billion in January, but quickly fell to $3.6 billion in February, $3.4 billion in March and $2.6 billion in April.

Globally, venture capital firms are becoming more vocal about a looming economic slowdown and the need to be more “defensive”. Investors are asking startups to focus on return on investment and reducing cash burn.

Japanese conglomerate SoftBank – a prominent investor in startups the world over with its multi-billion-dollar Vision Fund – is “severely cutting” its investments, chief executive Masayoshi Son said earlier this month after the company posted its biggest loss ever in the fiscal year.

Founders, on their part, are grappling with questions of how to pay salaries and keeping their companies afloat.

Discover the stories of your interest



So far this year,
leading startups have fired more than 3,000 employees. These include
ed-tech unicorn Unacademy, quick commerce startup Blinkit, online learning platform Lido,
edtech firm Vedantu,
online furniture retailer Furlenco, social commerce startups Meesho and Trell, and
digital credit ledger OKCredit.

“The last four-five years of IPL advertising has been fuelled by the funding frenzy of these tech start-ups, with VC-backing. Now, the funding is gone and there is no silver bullet,” said a senior executive at a consulting firm.

For these companies, the only option is to reduce marketing spends, which will directly impact the IPL. “At any time, Rs 1,000-Rs 1,200 crore of advertising money can vanish from IPL,” the executive added.

According to trade pundits, over 50% of IPL advertising is from new-age companies.

“Money on tap for new-age companies is over, which means over half of IPL’s ad money is at risk,” said Harish Thawani, former head of

Communications. “Choppy waters require careful navigation. Bidders will be wary.”

IPL viewership has fallen by almost 30% this season. The Board of Control for Cricket in India (BCCI) has also doubled the reserve price of its media rights for the next five-year period.

IPL’s current media rights holder, Disney Star, had paid Rs 16,347.50 crore for five years till the 2022 edition.

For the next cycle (2023-2027), the combined base price for the four available packages has been set at Rs 32,890 crore. BCCI will auction the media rights from June 12.

“… conventional sponsors have moved out and it is the new VC funding that is being burnt on air on IPL. If this flow stops, it will be a challenge,” said Raj Nayak, a veteran broadcast executive and the founder and managing director of House of Cheer, a media, entertainment technology hub. “The ratings have also dropped considerably this year and there is too much cricket fatigue setting in.”

Be that as it may, the T20 league will see takers as no other property in the country gives a pan-India platform to brands, a top executive at a sports network said, adding that the funding challenge may impact a few companies if IPL delivers on fundamentals – viewership and reach.

“The question is, if the ratings continue to drop, will it be feasible? Then the answer is no,” the executive added.

Some industry trackers, however, said that money drying up was a cyclical thing.

“It may impact for 12-18 months, but over five years, there will again be a time when buoyancy will be back,” said Anupriya Acharya, CEO, South Asia, Publicis Groupe. “Overall, there is robustness in the basic economic parameters. I believe the category of advertisers who take IPL will change and it’s not like the entire money will dry up.”

Disney Star, Sony Pictures Networks India (SPN),

(ZEE), Viacom18/Reliance, Amazon, Alphabet Inc (Google), Dream Sports (Dream11/Fancode) and Times Internet are some of the companies that have picked up tender documents to bid for IPL media rights.

Times Internet is the internet arm of Bennett, Coleman and Company Ltd, which also publishes this newspaper.



Source link

- Advertisment -

YOU MAY ALSO LIKE..

Our Archieves