TLDR:
- Private markets facing correction after pandemic funding boom
- Startups focusing on fundamentals like profitability over growth
Private markets have seen a correction post a funding boom during the pandemic, leading to the overvaluation of startups. Startup founders, even at an early stage, are now shifting their focus towards core fundamentals such as operating models and profitability. Investors suggest that this shift reflects a maturing ecosystem where long-term value is prioritized over short-term hype.
Startup initiatives during the pandemic incurred high marketing costs, leading to a focus on margin establishment and customer retention. Early-stage startups are expected to demonstrate 3-4X growth annually, with a gradual decrease in growth rates over time. Mid and late-stage startups are emphasizing profitability and unit economics to prepare for public market listings within the next 24-36 months.
Mid-stage startups like Infra.market and Meesho are enhancing profitability by expanding product catalogs and rationalizing loss-making units. The aim is to achieve sustainable growth and improve revenue growth through initiatives like international expansion. With the funding winter easing and IPOs gaining traction in India, founders are exploring IPO opportunities across all stages.
