Many times, founders choose to not announce their fundraise as they do not want their competitors to find out or have an edge. But is this the right thing to do?
We are just eight months into 2021, and the Indian startup ecosystem has already added 23 new entrants to the coveted $1 billion valuation club.
Heading into 2021, research firms and industry experts had predicted that India will see a significant increase in the number of unicorns. An earlier NASSCOM report had stated that India will have 50 unicorns before 2021 ends. It's safe to say that the ecosystem has surpassed all projections.
In 2020, even with the pandemic wreaking havoc on the economy, 11 startups from India attained unicorn status, while PhonePe reached a $5.5 billion valuation as an independent entity after its spin-off from Flipkart.
Already, India’s unicorn club boasts of startups like fintech majors Paytm and Zerodha, mobility player Ola, foodtech startups such as Zomato, and Glance, Cars24, Postman, among others.
While many wonder if this is the right way to look at the ecosystem, these new unicorns have boosted hopes for the ecosystem.
Then, the question arises — when is the right time to announce funding? According to Avnish Bajaj, Founder and Managing Director, , at the end of the day, businesses are built on the back of execution.
“There was a time when people has a philosophy that startups should be in stealth modes, where they said — 'lets go build some really great product and we’ll launch it with a big fan fair'. But I think, in the new world, they are built and launched quickly. You can see it with Clubhouse. So it is even more about the execution than about the idea,” adds Avnish.
Second, one has to factor in that even though your competition might find out, they also may get locked out of funding because you’ve gotten funded.
Whoever was going to fund that business might come and look at you now.
“And if you think you are the best, capital might actually concentrate towards you. Third, you may find out more about what others are doing and other competition, because people will reach out to you. And fourth — which I think is very important — is it helps attract talent, and therefore by not announcing you might be delaying that flywheel kind of process,” explains Avnish.
YourStory’s flagship startup-tech and leadership conference will return virtually for its 13th edition on October 25-30, 2021. Sign up for updates on TechSparks or to express your interest in partnerships and speaker opportunities here.
For more on TechSparks 2021, click here.
Applications are now open for Tech30 2021, a list of 30 most promising tech startups from India. Apply or nominate an early-stage startup to become a Tech30 2021 startup here
Edited by Kanishk Singh
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
Link : https://yourstory.com/2021/08/matrix-moments-startup-fundraising-announcement-avnish-bajaj
Author :- Salonie Ganju ( )
August 14, 2021 at 06:10AM
YourStory