Note to Readers: MC ExpertEye is a weekly series of articles that will dive deep into an important topic by seeking answers from experts.
We can’t get out of 2020 fast enough. A year when everything as we knew it was upended and most of us were stopped in our tracks by a tiny microbe that wrecked lives and businesses. Startups, too, found themselves facing unprecedented challenges but as we head into 2021, optimism and hope are riding high. Multiple home-grown companies have announced plans to go public, as the rest try to bring sanity to the ecosystem by targeting profitability.We asked experts what 2021 had in store for Indian startups? Here is what they said:Karan Sharma, Executive Director, Co-Head – Digital and Technology Investment Banking, Avendus CapitalThe year 2020 has been a defining year for the Indian tech space. It brought to the forefront the inherent scalability of tech businesses and how consumers and businesses can effectively leverage digital channels. Further, it helped startups take a deep look at the business model they want to build for the long haul. They could reset customer expectations around discounting and incentives, experiment with effective modes of marketing, cut long-pending flab in the system and steer the ship towards sustainable economics.We expect companies to continue on this path of profitability in 2021, as there are a significant number of companies that are well poised to go public, most of them on domestic stock exchanges, in the next 12-24 months. Quite a few e-commerce market leaders, payments and logistics enablers, online services companies and enterprise-focused businesses have turned operationally profitable and we expect them to continue that run through 2021. Indian public markets have always rewarded profitability higher than growth, and these tech leaders will certainly look to tap into that theme.Hemant Vishnoi, Co-Founder, EnkashWhile tumultuous 2020 is coming to an end, I believe 2021 would be an incredibly positive year for the Indian startups. Funds flow to India remains strong, the stock market has shown tremendous resilience and by all indications and projections, the Indian economy is looking to grow at more than 8 percent in 2021.
Sumit Agarwal, founder, Vyapar Tech Solutions
2021 will be a very interesting year. There will definitely be lot of investment coming in the Indian startup ecosystem from global players. I personally don't think that mindset will change drastically towards profitability or listings but 2020 has taught people to be more prepared. So, in my opinion the startup ecosystem will try to be more prepared to sustain and live through these COVID-like situations.
Profitability and stock listings is a mindset that every startup founder doesn't have. Different founders startup for different reasons, example FOMO, an interesting problem, quick money, name and fame, etc. I have seen very few founders who build for IPO and VCs are completely comfortable with that, as their main purpose is to multiply wealth, whether it is through M&A or listings.
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