Startup founders expressed optimism about the improvement in funding environment this year with several planning to go public despite global challenges, according to a report by venture debt firm InnoVen Capital.
"79% of founders are optimistic that funding environment will improve in 2025," the report stated.
Startup founders, who were surveyed, opted for the IPO route as the mode of exit, with 73% founders in its favour up from 64% in 2023. The report added that the preference for M&A continues a downward trajectory, falling to 19% this year from 22% in 2023 and 28% in 2022. Overseas IPOs are also not preferred anymore.
Majority of startup founders chose profitability over growth with 41% of those surveyed claiming that they have already turned profitable, up from 30% last year.
"53% of founders stated profitability as a bigger focus area, while 47% claimed focus on growth (vs. 38% last year). 41% of founders claim to be already profitable, up from 30% last year and 19% the previous year," according to the report.
On the jobs front, startup founders expect the pace of hiring to increase this year. Around 47% of founders expect hiring to go up compared to 39% last year.
Ashish Sharma, Managing Partner at InnoVen Capital India, said the report will provide useful insights to all stakeholders that have a keen interest in the venture ecosystem.
"While the macro is challenging, we expect several high-quality companies to go public in 2025," he added.
With AI rapidly gaining strides, startup founders, who believe that it will have a significant impact on their business models over the next 2-3 years, has also gone up.
"28% believe that believe that Artificial Intelligence will have significant impact on their business models over the next 2-3 years (compared to 23% last year), primarily in the Fintech and Enterprise/SaaS space," the survey showed.
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