Startups are really trending or it is another bubble on
verge of bursting:-
In India a lot of startups are coming every year, Specially
online startups. Now question arises whether it is another bubble which is
going to burst anytime or really there is need of startups.
You have seen newspaper in past
and seen that new startup has raised funding from global ventures and they
become richer in days. Now for that companies funding is getting dried up and
companies are offloading their employees and even a lot companies had stopped
their operations.
These startups are failed as they
don’t have sustained business model and they just want to lure customers buy
giving some freebees and expecting funding from investors.
These all companies were loss
making and they recorded lot of losses as business model have lot of
deficiencies. This doesn’t means that investors are dried up , Now investors
become more cautious as they had lot of lot of money. Now investors are looking
for businesses with sustained business model.
You can now judge form figures
that in second quarter 2016-17 fund raised has been dropped to $583 million
from its recent peak of nearly $3 billion in late 2015, according to CB
Insights. It's a sharp turnaround for a sector that attracted more than $8
billion last year.
India had population of 1.3
billion and so many IT professionals which always attract investors as with
such a population every business will do great. There were startups such as
Flipkat, Snapdeal, Paytm, Ola and lot many which have great success in recent
past. Also inflation is low in India and India economy is rising at a decent
pace which also attracts lot of investors. Now even Flipkat, Snapdeal facing
difficulty in raising funds and they even adoped cost cutiing methodology.
Yet there is a simple explanation
for the reversal: Investors say India's tech sector experienced a classic
bubble, similar to the one that rocked Silicon Valley when it burst in 1999.
There were few startups which will survive this bubble. The companies which get
survived this period will really become future of India.
Peppertap, a grocery delivery app
financed by Sequoia Capital and Snapdeal, shuttered its delivery operations and
"pivoted" to logistics. Another funded grocery delivery startup,
Grofers, shut its operations in nine cities across India.
In late 2015, Indian unicorn
Zomato laid off about 300 staffers.
Young techies have been among the
hardest hit. Some university graduates even had job offers rescinded by tech
startups, according to Gurumurthy Balasubramanian, the chief placement officer
at Birla Institute of Technology and Science.
Few startups get merged with other
startups so that they can both survive this tough period.
The total number of VCs
participating in funding in Q1 2016 were 379. Blume Ventures continued
to bet big on the ecosystem with 20 deals between January and June 2016. This
was followed by Accel, Sequoia, and Kalaari capturing the
following three spots with 10, nine, and eight deals respectively.
In a
more recent development, Blume continued as the leader in August 2016 with
three deals, followed by Softbank, Sequoia, Kalaari, and Accel.
In India there are more than 19000
startups. These startups have combined raised $3.5 billion funding in first
half of year 2015 and No. of investors were increased from 220 in 2014 to 490
in 2015.
In year 2016 Upto Dec. more than
200 startup’s has been shutdown.