Recently I was going through some old startup news Where I found that Vision fund – 2 Is ready for launch. It is excellent news. As I am tracking them, I can see that some of them are big enough to fund other startups and get funding from others. So What is the reality on this front? Let’s check.
There are some excellent Startups in India, and due to them, we saw some great investors’ names and some employment generated. Flipkart, Ola, Paytm, Delhivery, Acko, and so on. Startups like Snapdeal have even faced some existential threats, but they survived. Startups like Zomato and Swiggy changed our habits of eating. Startups like Paytm, PhonePe, and Freecharge change our payment habits for good. Startups like OYO and Treebo hotels are developing another aspect and competing with their global peers. Yes, there is some issue with OYO, but now the growth is also there. But the question is, where is the Planning where they decided to go to stock exchanges and list themselves?
On the other hand, big names like ola, Flipkart, and Paytm made names like GIC Singapore, Sequoia, Tigre global, and Softbank. They even helped some small startups to grow. So startups like BYJU grow and teach us a way to learn, but what about next?
I can say that as now it is now not a startup but a company owned by Walmart, Flipkart may come to the Capital market in 2021 or 2022. But what about PayTM or Ola? Yes, they are doing it a good and changing habit of Indians, but till what point will it be there living on investors’ money? Showing huge losses like 2k cr or 3k cr on the names of customer acquisition costs which are nothing but discounts?
What I am listening to is now Startups like PayTM is heading towards a difficult time for startups. Payment banks and other financial services are great, but this is not a money-making business. UPI destroyed some businesses and forced some to change their model.
But why does a startup need funding? I agreed that in the early stages, when operating cash flow hardly existed, that time a company needed funds for growth. And I am not against equity financing. I know that telecom, Steel, Banking and Finance, Insurance, and some research-oriented business also needed funding. But till what point? Are they keeping that tab open for not going public? It looks like that.
At least in India, Being a private limited company is way better than being a public limited company. A Public limited company is answerable to many. A private limited company is not accountable to anyone. I agree that Some great businesses are personal, like Airbnb, Pinterest, and many more, but we can’t deny that some great companies also went public.
I am trying to ask why PayTM, Ola, and some more are private? No question that there will always be some big money available, but Public scrutiny is also a thing.
