Funding winter for Indian startups likely to end by March: Experts

Investors attending the TiE Global Summit (TGS) exuded confidence that funding winter for Indian startups will end by March but said budding entrepreneurs seeking funds must come up with credible plans to generate returns on investments, as fancy valuations will no longer impress global fund managers.

Funding winter, which refers to the drying up of funds for startups, remained the overarching theme at the recently concluded TGS 2023, the eighth edition of the flagship event organised by TiE.

The event, held in conjunction with the Singapore Fintech Festival, was attended by over 2,000 participants, including experts, fund managers, thought leaders and startups.

As regards India, We Founder Circle co-founder Gaurav VK Singhvi said, “Things would improve for Indian startups by March next year”.

He said that global investors are sitting on funds and once the “uncertainty” with regard to geopolitics, especially the Ukraine war and the Middle East crisis, gets over, the “funds would start flowing”.

A similar opinion was expressed by Thiel Capital managing director Jack R Selby, who said investors are sitting on a lot of ‘dry powder’ (funds) and looking for opportunities to invest.

However, the startups will have to come up with credible plans to ensure proper returns on investment as “fancy valuations” will not impress fund managers, Selby said, adding that “the whole funding ecosystem is being reset”.

Funding winter and the ways to overcome it remained the running and the most important theme at the conference.

The slowdown in funding for Indian startups began around mid-2022. During January-July 2023 fund flow dropped by as much as 77 per cent to about USD 4.4 billion against USD 19.5 billion in the year-ago period.

In addition, the speakers at the summit also talked about the pivotal role being played by startups in driving innovative solutions and underlined the need for networking, collaboration and knowledge sharing among entrepreneurs.

“TGS 2023 saw global investors, entrepreneurs, and enterprise innovators convene from across the globe to discuss emerging trends and opportunities in sustainability, technological advancement, and social impact, as well as the pivotal role of entrepreneurship in driving innovative solutions,” said a press release.

The event featured more than 100 speakers from the investor and founder communities, inspirational leaders from sports and entertainment, and industry leaders such as Ant Group, GitHub, Microsoft and DBS Bank, it added.

According to TiE president Amit Gupta, the next TGS, which is the annual flagship conference bringing together global leaders, entrepreneurs, investors and policymakers, will be held in Bengaluru.

Besides investors and budding entrepreneurs, the conference was also attended by acclaimed film director and producer Shekhar Kapur, inspirational sports legends Stephen Fleming, Geoff Allott, Prakash Padukone and Deng Yaping.