One important thing: Food delivery platform Zomato continues to struggle with top-level exits. Gunjan Patidar, the company's chief technology officer and one of its first employees, is the most recent departure. 

In today’s newsletter:  

• Investors love cockroaches
• Govt releases draft online gaming rules
• What India ordered on New Year's Eve

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The mythical unicorns turned out to be the most sought-after startup species in 2021. After a year, the story has progressed from a utopia to a harsh reality.

And the reality for those in the startup ecosystem is a long, uncertain funding winter. Investors are now betting on grounded, immune cockroaches, which are more likely to survive whatever comes next.

Startup founders, even those in the early stages, who are entering the fundraise race this year are being asked very little about the startup's projected revenue growth, TAM, and outlook on the sector the startup is catering to.

• This year, funding discussions have focused on unit economics, cost frugality, and profitability.

Naturally, startups had to shift their focus from 'growth at any cost' and unicorn valuations to sustainable growth and profits.

Data suggests that the current mood may last a little longer.

• In 2022, private equity and venture capital funds made 1,130 bets on startups worth $23.95 billion, a drop of more than 30% from the 1,215 bets worth $35.46 billion made in 2021.

According to Venture Intelligence data, December saw the lowest funding for startups in the last two years. In December 2022, Indian startups raised $799 million in 54 deals, a drop of more than 30% from the previous month's total of $1,149 million in 69 deals.

With the funding winter expected to worsen in 2023, investors and industry experts believe unicorn valuations will take a back seat in the new year as well.

“People pay valuation for growth. If it's a reasonable profit characteristic at high growth, only then people are ready to pay high premium valuations. The companies that are either not growing or are not going towards profitability will have a problem,” Pankaj Naik of Avendus said.

Anand Lunia of India Quotient advised founders not to be ashamed of saving their companies by reducing team sizes, changing office spaces, taking salary cuts, or even raising funds at a lower valuation.

"Media and your peers will not respect you, your family also may have to suffer, but everyone will understand in the end if you survive and thrive eventually," Lunia said.

[Go deeper]

It's the first working day of 2023 and the government comes bearing gifts to the country's online skill-based gaming industry.

India has released draft online gaming rules for public consultations, thereby taking the first step towards fulfilling the long-standing demand of the skill-based gaming industry. 

As per the draft rules, self-regulatory organisations (SROs) will be responsible to certify what is permitted as an online game in the country. These organisations will be registered with the Ministry of Electronics and Information Technology (MeitY), which was recently appointed as the nodal ministry for the sector.

"It is basically a prohibition of wagering on any game...The online games that offer winnings, any game that allows wagering on the outcome is effectively a no-go area," Union minister Rajeev Chandrasekhar said. 

Gaming intermediaries will also be required to conduct additional due diligence by displaying a registration mark on all online games from the SRO, informing users of their withdrawal and refund policies, and implementing a Know Your Customer (KYC) procedure for user account registration, among other measures.

• Kids under the age of 18 will need parental consent for playing these games, the minister said.

In the past couple of years, India's gaming sector has seen unprecedented growth in terms of app downloads and revenue with Indian consumers becoming more comfortable spending money on mobile games. These rules will likely shape the future of the nascent but fast-growing industry. 

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On New Year's Eve, cloud kitchens and platforms such as Swiggy and Zomato saw record-breaking traffic as people couldn't stop ordering Biryani, pizza, cake, burgers, and dosas!

Swiggy had delivered 61,287 pizzas and 3.5 lakh biryani orders by 10:25 p.m. Zomato wasn't far behind, having already delivered over 16,000 biryanis by 7 p.m.

On New Year's Eve, Biryani By Kilo recorded its highest-ever sales of Rs 2 crore in December 2022. Ankit Nagori's cloud kitchen CureFoods delivered 70,000 orders. Eatclub had twice as much business as a normal day.

Here are a few interesting things that caught our attention:

• The five most-ordered items on Instamart were mixers like soda and tonic water, chips, cold drinks, and curd.

• Blinkit had delivered three times as many orders as it had the previous year.

• The largest party order of the day came from a Bengaluru customer, who placed a Blinkit order worth Rs 28,962.

Go deeper

On this day in 1975, Microsoft co-founders Bill Gates and Paul Allen used the term "Micro-Soft" for the first time in a contract with MITS, which used Gates and Allen's version of BASIC in its Altair 8800 computer. (Picture credit: computerhistory.org)

• Luke Dashjr, one of the original core developers of Bitcoin, claims that a hack that happened right before the new year caused him to lose "basically" all of his bitcoin, which were worth $3.6 million.
  
  
• The Securities Commission of The Bahamas has seized approximately $3.5 billion worth of cryptocurrency from the collapsed crypto exchange FTX.

As you relax and enjoy your time off, what is the one thing that really gets under your skin? Work calls!

We've all been there. It can be infuriating to be spending time with your family while your phone is constantly buzzing with work emails, messages, and notifications.

So, to solve this problem, Dream11, one of the biggest fantasy sports platforms in the world, has come up with an "Unplug" policy that lets employees take days off without being bothered by work. The company will also impose a fine of Rs 1 lakh on employees who disturb their colleagues on holidays. Find out more

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