Flipkart Chief Warns Startups Of Turmoil And Funding Crunch For Another 12 To 18 Months

Flipkart, which is owned by Walmart and was last valued at $37.6 billion, put a hiring freeze in place earlier this year and halted its acquisition spree, which had previously seen it spend about $500 million to expand into online healthcare and travel categories.

Flipkart Chief Warns Startups Of Turmoil And Funding Crunch For Another 12 To 18 Months-ravzgadget
Flipkart Chief Warns Startups Of Turmoil And Funding Crunch For Another 12 To 18 Months

The startup ecosystem’s funding winter may last another 12 to 18 months, and the industry may face “a lot of turmoil and volatility,” e-commerce giant Flipkart CEO Kalyan Krishnamurthy has warned executives.

“This is going to be tough next year. My estimate is that a lot of startup founders will hit the market between April to June next year, and that’s the moment of truth for the ecosystem,” he said at a gathering over the weekend organized by Indian newspaper Economic Times.

MORE FROMRAVZGADGET: Bob Iger Is Returning As Disney CEO In A Dramatic Shakeup

Krishnamurthy, a reserved and soft-spoken executive, told hundreds of attendees that startup founders should embrace a downturn and restructure their businesses.

According to investors, many startup founders are unwilling to take a hit on their previous valuations when seeking new funding.

Some startup founders believe that if a funding event suddenly makes the employees’ existing stocks less valuable, they will be unable to attract and retain talent.

“In 2001, companies saw a 2x to 6x spike in valuation with some underlying growth and profitability assumptions for the next two to three years. I think it quickly became clear that those assumptions are not going to play out,” said Krishnamurthy, describing the boost to startup funding in India last year.

In 2021, Indian startups raised a record $39 billion as investors doubled down in emerging markets. In contrast, as the market reserved its position earlier this year, funding fell below $3 billion in the September quarter.

And that means reflecting on what needs to be done to survive, he explained.

Krishnamurthy, who previously worked at Tiger Global, famously assisted architect Flipkart in cutting its workforce by 30% five years ago in order to help the firm become more efficient. “It’s not a problem because we grew from there,” he explained.

MORE FROM RAVZGADGET: YouTube Has Its Own ‘Tudum’ Launch Sound Now

Flipkart, which is owned by Walmart and was last valued at $37.6 billion, put a hiring freeze in place earlier this year and halted its acquisition spree, which had previously seen it spend about $500 million to expand into online healthcare and travel categories.

SoftBank, Tiger Global, GIC, Canada Pension Plan Investment Board, Qatar Investment Authority, Tencent, and Franklin Templeton are among the firm’s investors. It does not intend to go public for at least a year.

Share this article with friends
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments