prasad1
Active member
[FONT="]Once known as the next frontier for tech investments, India has seen many of its top start-ups seem to be going through a bit of a rough patch lately.[/FONT]
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According to News Corp VCCEdge's quarterly deal report for 2017's calendar year first quarter, the value of start-up deals in India faced the worst quarterly performance since the third quarter of 2013 — with 165 deals made at a value of $237 million.[/FONT]
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"Unicorns in India are facing issues related to profitability and (a) slowdown in funding," said Satish Meena, senior forecast analyst at Forrester Research.[/FONT]
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Meena told CNBC that most of the companies, especially those in online retail, are struggling to bring profitability into their business as a result of over-expenditure on customer acquisition following Amazon's entrance into the Indian market in 2013.[/FONT]
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Furthermore, Meena said, the problem has been exacerbated by an increasingly challenging regulatory environment — with more rules on discounts — and the government's push for demonetization in November 2016, making it difficult for start-ups to realize aggressive targets.[/FONT]
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Echoing Meena's statements, Marcelo Ballvé, research director at CB Insights said "several of India's prominent e-commerce and food delivery unicorns have not fared well recently."[/FONT]
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As a result, multiple high-profile unicorns have faced a reduction in valuation and fund raising efforts and the sector has seen an increase in consolidation.[/FONT]
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For example, Ballvé cited the recent fundraising round for India's largest e-commerce retailer Flipkart, in which the company's overall valuation slid despite raising more than $1 billion.[/FONT]
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Just a month before, its rival Snapdeal announced that it was laying off up to 600 employees due to over-expansion and diversification. In recent weeks, rumors have even started spreading about the possibility of an acquisition between the two companies, with VCCircle reporting that the deal could happen as early as this week.[/FONT]
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Ballvé also added that food delivery unicorn Zomato was "losing millions every year and has not raised in nearly 600 days."[/FONT]
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On the transportation front, a recent Economic Times article reported that transportation application company Ola suffered losses of Rs 2,313.66 crore (about $356 million) in the financial year of 2016 — nearly 3 times what it lost in the last previous financial year. The losses were a result of fierce competition from a foreign rival — Uber.[/FONT]
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CNBC has reached out to Flipkart, Snapdeal, Zomato and Ola for comments regarding their recent performance, but has yet to receive a reply.
https://finance.yahoo.com/news/india-apos-top-start-ups-052038074.html[/FONT]
[FONT="]
According to News Corp VCCEdge's quarterly deal report for 2017's calendar year first quarter, the value of start-up deals in India faced the worst quarterly performance since the third quarter of 2013 — with 165 deals made at a value of $237 million.[/FONT]
[FONT="]
"Unicorns in India are facing issues related to profitability and (a) slowdown in funding," said Satish Meena, senior forecast analyst at Forrester Research.[/FONT]
[FONT="]
Meena told CNBC that most of the companies, especially those in online retail, are struggling to bring profitability into their business as a result of over-expenditure on customer acquisition following Amazon's entrance into the Indian market in 2013.[/FONT]
[FONT="]
Furthermore, Meena said, the problem has been exacerbated by an increasingly challenging regulatory environment — with more rules on discounts — and the government's push for demonetization in November 2016, making it difficult for start-ups to realize aggressive targets.[/FONT]
[FONT="]
Echoing Meena's statements, Marcelo Ballvé, research director at CB Insights said "several of India's prominent e-commerce and food delivery unicorns have not fared well recently."[/FONT]
[FONT="]
As a result, multiple high-profile unicorns have faced a reduction in valuation and fund raising efforts and the sector has seen an increase in consolidation.[/FONT]
[FONT="]
For example, Ballvé cited the recent fundraising round for India's largest e-commerce retailer Flipkart, in which the company's overall valuation slid despite raising more than $1 billion.[/FONT]
[FONT="]
Just a month before, its rival Snapdeal announced that it was laying off up to 600 employees due to over-expansion and diversification. In recent weeks, rumors have even started spreading about the possibility of an acquisition between the two companies, with VCCircle reporting that the deal could happen as early as this week.[/FONT]
[FONT="]
Ballvé also added that food delivery unicorn Zomato was "losing millions every year and has not raised in nearly 600 days."[/FONT]
[FONT="]
On the transportation front, a recent Economic Times article reported that transportation application company Ola suffered losses of Rs 2,313.66 crore (about $356 million) in the financial year of 2016 — nearly 3 times what it lost in the last previous financial year. The losses were a result of fierce competition from a foreign rival — Uber.[/FONT]
[FONT="]
CNBC has reached out to Flipkart, Snapdeal, Zomato and Ola for comments regarding their recent performance, but has yet to receive a reply.
https://finance.yahoo.com/news/india-apos-top-start-ups-052038074.html[/FONT]
