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Flipkart chief warns startups of turmoil and funding crunch for one more 12 to 18 months • TechCrunch


The funding winter for the startup ecosystem could proceed for one more 12 to 18 months and the business may need to grapple with a “lot of turmoil and volatility,” e-commerce big Flipkart chief government Kalyan Krishnamurthy has warned executives.

“That is going to be powerful subsequent 12 months. My estimate is that plenty of startup founders will hit the market between April to June subsequent 12 months, and that’s the second of fact for the ecosystem,” he mentioned at a gathering over the weekend organized by Indian newspaper Financial Instances.

Sometimes a reserved and soft-spoken government, Krishnamurthy advised lots of of attendees that startup founders ought to embrace a down-round and restructure their companies. Many startup founders are usually not wiling to take a haircut on their earlier valuations in new funding deliberations, traders say.

Some startup founders consider that they will be unable to draw and retain the expertise if a funding occasion all of a sudden makes the workers’ current shares much less priceless.

“In 2001, corporations noticed a 2x to 6x spike in valuation with some underlying progress and profitability assumptions for the subsequent two to a few years. I believe it shortly grew to become clear that these assumptions are usually not going to play out,” mentioned Krishnamurthy, describing the increase to startup funding in India final 12 months.

Indian startups raised a report $39 billion in 2021 as traders aggressively regarded to double down in rising markets. In distinction, because the market reserved its place earlier this 12 months, funding within the quarter that led to September slid under $3 billion.

And which means an introspection on what must be finished to outlive, he mentioned.

Krishnamurthy, who beforehand labored on the funding store Tiger World, famously helped architect Flipkart reduce its workforce by 30% 5 years in the past to assist the agency turn into extra environment friendly. “We grew from there, so it’s not an issue,” he mentioned.

Walmart-owned Flipkart, final valued at $37.6 billion, put a hiring freeze earlier this 12 months and halted its acquisition spree, which earlier noticed it spend about half a billion {dollars} to broaden into on-line healthcare and journey classes. The agency — which counts SoftBank, Tiger World, GIC, Canada Pension Plan Funding Board, Qatar Funding Authority, Tencent and Franklin Templeton amongst its backers — doesn’t plan to go public for no less than a 12 months.

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