WHAT IS THE FUTURE OF START-UPS IN INDIA @2023?
EMPLOYEE FIRE – DEHORNED – LOSSES! WHAT IS HAPPENING TO INDIAN START-UPS AND WHY?
Indian start-ups are seeing a downfall and the company employees are seeing a wave of mass sackings. It is clear that the start-up companies are seeing a hard time. Let us now see what is causing these losses and how it is causing them.
Start-ups are companies by an individual or a group where their sales concentrate on a single product or service; the single product or service is usually an own idea of the founder of the company. Start-up companies can be apps, products, and other services.
Previously in 2021 and 2022, India saw many new start-ups which made us look forward to a brighter future for the industry but before the joy is over, those start-ups are seeing a loss, more like a huge loss.
If we look into the details – it is observed that more than 25,000 employees were fired from 90+ companies since 2022. Some start-ups also had to shut down their companies due to no funding and low profit; the number of start-ups shut down is above 2000 as of 2022. And those start-ups that are still continuing are also seeing a loss and are going through a hard time.
What are the challenges Indian start-ups are facing
1.Lack of funding –
This year we are seeing the lowest number of start-up deals in the past 9 years. We see that in India this year (2023) one start-up is being funded every 10 hours which means 2 startups every day as of the month of February. But if you look at the same month’s data from 2022, it can be seen that every three hours one start-up received funding and this shows us that this year start-up investments fell by 75% this is because investors are not ready to take risks. If we compare the data, it can be observed that start-ups are not receiving funding while some are being funded less.
2. Miss judged the Indian Market –
Start-up companies and investors miss interpreted the market by seeing India’s large population. Companies saw the growing population and growing purchasing power as advantages for their business and made their budget planning according to their levels and expectations and that’s where they took the wrong step. But little did they know that very less of the Indian population is actually buying from online companies and that most of the population are not interested. If seen in numbers, out of 300 million consuming households in India but only 10 million households are actually contributing to the consumption. That means that the market that the start-up companies saw wasn’t that big but in fact, is much smaller.
3. Broken revenue models
Start-ups are a business model that should take short-term losses during the start and aim for long-term profits in the future. But right now, with the growing competition and low chances, start-up companies should start coming up with ideas to make more profit to avoid having to shut down. Some start-ups even when they have the capability fail to make profits; for example, last year 23 start-ups were declared ‘unicorns’ (those start-ups that value more than $1 billion) but out of those only 4 start-ups are making profits.
These three challenges are what are stopping start-ups from going forward and leading to a shutdown. This is not just in India but many countries around the world like Europe, and America are also facing the same downfall. So, is this the end of the Start-ups? What it takes for this to change? Let us discuss this in the comment section and stay with us at https://tvbharat24.com/.