From plummeting revenue multiples on the NASDAQ to a fall in IPOs, no category has been spared, he said. “New IPOs have fallen to a two-decade low. In H1 of 2021, there were 100 IPOs. If you just look at the previous three years of H1 on average, there were 33 IPOs at least. However, in the first six months of this year, there were only five IPOs,” he said, while giving the keynote address at India Internet Day by TiE Delhi-NCR.
Explaining the reasons for the global economic blues, the Flipkart CEO listed four points: the end of cheap money with rising inflation and interest rates; softening of the global economy; war worsening inflation with supply chain shocks and essential commodities and digitalisation. “I think we all overestimated the digital shift coming from Covid.”
Krishnamurthy said world economies are seeing the highest inflation in the last 40 years. “Everybody had originally shared some estimates at the beginning of the year, and everybody has actually downgraded their own previous forecasts and estimates,” he said.
Elaborating on overestimation of Covid’ digital shift, he cited the slow growth of Zoom and Peloton, both of which gained a lot of popularity during the lockdown as people were spending all the time in their homes. “Zoom’s revenue growth slowed down from 300-400% in 2020 to single-digit growth rates right now.”
India is also facing macro challenges like the rest of the world. “Inflation continues to be high. Wholesale inflation is much higher at about 13-14% and retail inflation is 6-7%. Most unicorns in India are still private, unlike the US, and we believe are trading at a premium. Once we apply global benchmarks to these Indian startups. We believe there could be a correction over the next few quarters across all categories,” he added.
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