Startups like Hike Cred are gas balloons
Guys I just fail to understand the venture capital ecosystem of India. Of course there are some gems and diamonds but i think there is a lot of gas balloons they blow with God knows whose money.
One such company was Hike. Started by Sunil Mittals son this company raised money from softbank and was a unicorn in 2019 valued at 1.5 Billion only to shut down last month.
Another balloon that seems to be getting blown with gas is Cred (yeah those ada during IPL. Look at their financials below valued at 800 Million USD.
CRED spent Rs 727 to earn Re 1 in FY20
=> Expenses: Rs 378.4 Cr
=> Operating revenue: Rs 52 lakh
=> Losses: Rs 360.31 Cr
=> Expenses: Rs 64 Cr
=> Operating revenue: Nil
=> Losses: Rs 60.87 Cr
Like this startup India will loose credibility. Attached are their mahan investors. God bless the pension funds that fund them. more
The VC Industry operates on 2 beliefs: 1. Startups are Lottery Tickets, buy 100 and 1 may be a winner which will cover the losses from the other 99 ... Of 100 Investments made by any Fund, 75 lose their entire Investment, 20 recover their Investment without any profit, 4 give 100 - 300% returns per annum and 1 gives more 1000% returns per annum, making the whole 100 Investments collectively profitable by 30 - 45% per annum. 2. As an Investor, the VC believes that the Company will be able to raise additional rounds at enhanced valuation within the next 24 - 36 months - This is the foundation of any VC's Investment and the current Investor is the most effective fund raiser for the Company. more
Its a normal practice for the (VC)Venture Capitalists / Angel Investors to wet the project thoroughly and also evaluate if that project is viable and can really take off well within the anticipated/projected time and accordingly make a considered decision before investing in such Startups. They will also critically assess, how long will it take for a startup to attain//graduate to a unicorn status. more
The author possibly disappointed why she missed the boat "called" start ups. no worries you can start one if you have "angel" with two legs (not wings) to get you to the right people who shares the loot. My barber asked about "start up" and I told him to wait till the Covid experts rest.( may be you should start like late Mr.Dhirubhai Ambani) more
In the past, Shell companies were created in foreign land to stash black money. Today, when there is an avenue to do the same in our country itself, why not set up a Startup company and continue stashing? In fact, even if its a looting business, the law will see it as a Legitimate Loot. As long as the Government runs for Big Corporates, such sleazy joints will rise. more
Starts up need proper Guidence and monitioring for minimum 5 yrs or till yielding results in the form of a Brand image whichever is earlier otherwise the same enterprise with feasibility report indicating the reason for non operational. It is a common trend in India that non serious enterpreneur raise the fund & create assets & then after enjoying the facilities shut dowm the enterprise with legal dispute this is a valid reason for unutilised desputed commercial land even cities like kanpur carries around 20% unutilised commercial land centerally located which can be developed as beautiful housing projects for all categeories. more