It was earlier in May this year that India minted its 100th Unicorn – a startup that crossed the $1 bn valuation mark – a very special milestone indeed. ‘Money Control and Citibank In Conversation with unicorn startups of India’ is a very special show that brings together CEOs and founders of a handful of India’s top unicorns, shedding light on their journey, their ambitions, and how they’re dealing with inflation, global events, and the current funding winter that’s affecting startups around the world.
Hosted by Paromita Chatterjee, MoneyControl and Citibank conversed with panellists Vaibhav Tiwari - co-founder of Portea Medical, Ravi Bhushan - founder and CEO of Bright Champs, Chitresh Sharma - co-founder and CEO of Refyne, Saurabh Jain - co-founder and CEO of Livspace India.
We also have Tushar Vikram - managing director and head of commercial banking at Citibank India. Not many people know this, but Citibank has been banking startups from infancy to IPO and beyond for decades now, and offers a whole host of customised solutions for startups of all sizes. Some of these startups are now unicorns.
The full video is available below. Do check it out for a deeper insight into India’s startup ecosystem and its prospects, as well as for insights from India’s most successful leaders. What follows is an edited summary featuring key highlights from the 40-minute session.
Journey so far
Portea Medical: Having completed its 9-yr anniversary in May, Portea Medical is an established name in the home medical care space. Established with the idea of improving the quality of post-hospitalisation care in India, the company has been setting the pace for the segment since 2013.
Speaking of its initial days, co-founder Vaibhav spoke about how very exciting the endeavour was, the challenges of navigating a country as vast and diverse as India, and the learnings that followed.
Bright Champs: A relatively young entrant in the edtech space, Bright Champs has still managed to make quite the name for itself despite intense competition, benefiting greatly form the pandemic-induced windfall of home education. Founder Ravi explains that they owe their success to their open-minded approach to market feedback.
Refyne: A leading player in the earned wage access (EWA) market, Refyne is attempting to revolutionise personal finance in a country that has rapidly adopted consumerism but has traditionally been averse to credit. For their part, Co-founder Chitresh explains that they’ve found success by integrating into people’s behaviour and focusing on financial education and partnering with employers.
Livspace: Having established itself in the home interiors and renovation space, Livspace claims to be the largest and fastest-growing omni-channel home interiors and renovation platform in Asia. According to co-founder Saurabh Jain, the company is “bringing back the joy of doing interiors” by leveraging technology and a tonne of supply-side innovation in what is, admittedly, a fragmented industry.
Citibank’s perspective
As Tushar explains, Citibank established a vertical for the digital startup ecosystem 7-8 years ago. “We were one of the pioneers in this space because what we recognised here was the potential of the Indian startup ecosystem,” he adds. Today, the bank can boast of partnering with over 45% of India’s unicorns.
When asked about the situation now vs a decade ago, when funding was more freely available to startups, Tushar said that they still saw India as a sweet spot because of its strong infrastructure, excellent mobile penetration, government projects like Aadhaar, and more.
More importantly, he points out that “there is a credibility which the Indian startup ecosystem has, apart from market opportunity.”
On the subject of the funding experience today vs a decade ago, Vaibhav noted that not much has changed in the way that they do business. Any business needs to figure out how to scale in an optimum way. “I think the principles of how to use funds remain evergreen in that sense,” he says, noting that running the business frugally and prudently is key.
Ravi goes on to add that “business fundamentals are fundamentals. You need to stick to them to make an enduring company.” He points out that by focusing on your customers and capital efficiency, you will hit your goal eventually.
The key, however, is that you don’t over invest or become over frugal, notes Ravi. “It’s important to find the right balance.
Educating customers is now cheaper
One of the most interesting points that was brought up by Saurabh was that the amount of money it took to educate customers a decade ago wasn’t required today. “The slog overs have been done by the early players!” summarised Paromita. Noting that the proverbial ground is now more fertile thanks to past investments.
Tushar notes that the tech stack has also evolved considerably over the years. As a bank, Citibank, for example, is providing a great many more back-end services to these startups, services that are vastly easier to integrate thanks to their investment into digitisation and agility. Additionally, being a global bank, services developed in India, say, are easy to adapt and scale up to a global market, allowing startups instant and easy access to a global audience.
The potential for scaling up at a global level has never been higher.
Funding winter and embracing frugality
When asked about how they’re spending the money, and how they hope to survive the next few years in a funding winter, Chitresh explains that Refyne still has $98 mn to play with, giving them at least 14 yrs of runway, so to speak. They solved the money issue by offering a solution that was dependent on their customers, not the market. People are already paying, and that’s helping the business thrive.
Saurabh is of the same opinion, noting that India’s fundamentals in general are still very sound. He adds that questions from investors are always hard, because they want to understand you, the founder, and that such questions have remained unchanged for years.
Paromita: What about short term concerns such as recession headwinds and rising US fed rates?
“Nobody is insulated from the macroeconomic scenario and geopolitical situation that we are witnessing,” says Saurabh. What’s important is changing deployment strategies and focusing on agility and frugality, he advises. Ravi chimes in that he believes that a few years down the line, this funding winter will be seen as a blessing in disguise.
Tushar agrees, that many companies have streamlined their businesses and suggests companies continue to keep an eye on expenses and capital allocation. He adds that investors are continuing to invest in India and still see the country as a startup sweet spot, a reputation that is well earned, in his opinion.
Tapping into international markets
Paromita: Livspace is looking at international markets. Isn’t the Indian market big enough?
“India is a huge market with massive potential and a lot of room for growth,” says Saurabh. Vaibhav adds that any problem you add in India is a large problem to solve. Solutions and learnings from solving problems in India can thus help greatly when expanding to other markets.
“When we solve a problem fundamentally, we automatically think of scale,” he adds. “If you’ve cracked Bengaluru, then why not Singapore or Dubai?”
It is expensive, notes Ravi, but he also points out that companies like TCS — the largest player in the IT services industry — wouldn’t have existed if they hadn’t attempted to break into foreign markets. Additionally, he notes that cost arbitrage is also a big factor. There’s no lack of qualified teachers in India, for example, who can be employed to address the needs of the global market at scale.
Chitresh, who started a company in the UK before returning to India, notes that he retuned simply because of how exciting the Indian market was becoming. Again, Tushar points out that Citibank’s ability to operate in 98 markets is also playing a key role in Indian startups’ global ambitions, affording them accessibility and speed.
Closing thoughts: Predictions
“This is India’s century. Hold on, build it, and just take it from there.” - Vaibhav
“The game has just started” - Ravi.
“The toughest times make for the toughest teams and the toughest businesses.” - Chitresh.
“The India growth story is huge, and we’ve just barely scratched the surface.” - Saurabh.
“Keep an eye on customer experiences. As long as you do that, India’s growth story will do the rest.” - Tushar.
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