How will funding for Indian start-ups change post COVID-19?
“In the post-COVID-19 setting, there would be greater emphasis on business models that have the ability to sustain cash for longer, and on businesses with higher contribution margins,” says Pankaj Raina, Managing Director, Zephyr Peacock India.
Raina added that for its portfolio companies, Zephyr Peacock is exploring more scope for growth, even if it means altering their business models in the post-COVID-19 world.
Click here to read the full article on “The Hindu Business Line”
Below is an excerpt from the post that first appeared on The Hindu Business Line on 12 May 2020:
The funding for Indian start-ups took a hit in March and April, as anticipated, due to the COVID-19 pandemic. While investments fell 81.1 per cent to $0.33 billion in March 2020 from $1.73 billion in March 2019, April 2020 saw the funding figure plunge a further 84.3 per cent year-on-year to $0.12 billion, compared with $0.78 billion in the same month last year, according to data from Tracxn, a firm that tracks investments and financials of private companies and start-ups. In such a situation, how will investments pan out in the upcoming months? Investors say they are going to be a little more exacting about cash flows and focus more on how much of a cash runway the company has, in the post-COVID-19 scenario.
“In the post-COVID-19 setting, there would be greater emphasis on business models that have the ability to sustain cash for longer, and on businesses with higher contribution margins,” says Pankaj Raina, Managing Director, Zephyr Peacock India.
Raina said that they would place more emphasis on essentials. He added that for the portfolio of companies they have already invested in, they are trying to explore more scope for them to grow, even if it means altering their business models in the post-COVID-19 world.”
Click here to read the full article on “The Hindu Business Line”
