Global AI Conclave: 'Impatient' VC-led models often drive firms down unsustainable paths: Narayana Health’s Viren Shetty

Venture capitalist-led models that seek quick returns can drive companies down an unsustainable path, Viren Shetty, executive director and senior vice president of Narayana Health, has said.

“The problem with a VC-led model is that it's not a very patient source of capital, a lot of the time you have to end up proving very quick returns on the investment. That means chasing many such companies down paths that may not be sustainable in the long term,” Shetty told Moneycontrol on the sidelines of the Global AI Conclave.

The comments come at a time when healthcare startups in India have recorded $690 million in venture capital funding, so far, in 2023 in 109 deals, down 55 percent from $1.52 billion in 264 rounds in 2022, with venture capital investments slowing down during a long-running funding winter, data curated from Tracxn shows.

Healthcare funding has also come down drastically from $3.74 billion in 357 rounds in 2021 when venture capital funding was pouring into Indian startups, with high growth ventures drawing sky-high valuations.