Check Out What’s In-Store For Startups in 2017
2016 saw founders and investors took time to grasp the gravity of the rapidly changing funding environment. Two significant reasons for slowdown in funding were:
Investors were not able to exit from their previous investments. Only when they get a gainful return from these investments will they pour money elsewhere.
The not up to the mark valuations expected by investors plus non performance of milestones and profitability challenges by the startups is another reason for the crunch in funding.
Now that the worst of the upheaval is behind us, we can look forward to this New Year. Here are some events to watch out in the Startup space in 2017.
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Flipkart’s and Ola’s fund-raising efforts
Last year, Flipkart saw its valuation markdown from $15 billion to $5.54 billion by five of its investors. The price at which Flipkart raises its next round will move the needle towards an easing of the funding slowdown or a tightening.
Also, Ola is one of the few unicorns which have the heft to affect the future of the start-up ecosystem. Amount of funding it raises will help provide a clue as to whether investor sentiment towards Indian start-ups is improving or not.
Alibaba’s imminent entry
China’s Alibaba Group has been weighing an entry into India’s e-commerce either through its own platform or through an acquisition. This could be the year for its long awaited entry.
Big Billion Days sale in October 2017
Last year saw a neck-to-neck battle between Flipkart and Amazon. Flipkart outsold Amazon India in 2016’s all-important BBD. The control of the world’s last big Internet market is at stake. So, all eyes will be on who wins the 2017 round.
Focus on exits
Venture capitalists (VC) in India have struggled to get exits. Now the patience of their investors, called limited partners, is running thin.
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VCs will be open heartedly looking to get returns possibly through initial public offerings.
Rise of Crypto-currency
With the government’s leap towards a cashless economy this year, new ventures exploring alternate currencies such as crypto-currency are likely to interest investors.
Focus on Sectors: Innovation around healthcare, retail and fintech
The health care piece is so large that we saw plenty of action in the space and we will continue to see activity this year. The advancement in the space has been centered on new devices and using technology to bring in a new dimension to care giving. Similarly, startups and innovations around retail has moved from ecommerce to using artificial intelligence, personalization and on-demand customization of fashion to come up with the next set of solutions. Also, an increasing number of startups this year focused on brick and mortar retail stores and tackling inefficiencies in the physical format by opting an omni-channel strategy for retail business.
Govt. Reforms
The government's planned move in this year's budget has to be seen in this backdrop. For the deal momentum to accelerate going forward, the government has to take definitive steps to help the startups to tide over the disruption created by demonetization. One was taken couple days back when centre announced the overhaul of Rs 10,000 crore for startup.
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Conclusion
Startups are likely to get an impetus this year with a focus on funding and with the planned implementation of GST.
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