“One of the things we have been focusing a lot on, especially here in India, is emphasising the role for great CFO and making sure these companies are working with the right audit firms, and that there’s transparency in what’s being reported,” stated Hemant Taneja, MD and CEO, General Catalyst.
“Part of what we are trying to do is engage with these companies at multiple levels and not just work with the founder or the CEO, but it’s also really going into reason and understanding what is a financial view of business,” he added.
Instances of economic misappropriation within the final 12-18 months together with at startups akin to BharatPe, Zilingo and GoMechanic have prompted the enterprise fund to “deepen its capabilities” and collaborate more with the financial department at startups.
The VC, which began investing in India in 2019, has infused about $250 million from their $4.6 billion fund across early to late stages. The fund plans to pump about 10%-20% into Indian startups. Its investments spanned early to late stages in Cred, Cashflo, CityMall, Eeki Foods, FarMart, FitMint, GetSupp, LoopHealth, Magma, OneCode and Orange Health, among others.
Funding in Indian startups, which are primarily dependent on foreign capital, has dropped about 70% year-on-year in the first quarter of 2023, due to the continued impact of US Fed hiking interest rates.
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“If you think about the last 15-20 years where money has essentially been free, software companies have been able to build frankly without little regard for profitability,” Taneja stated.He added that whereas some founders had been fast to simply accept the structural shift from the excessive rate of interest period, “some founders are still in denial” as a result of they had been over capitalised.
“There are a lot of companies that have bloated valuations all over the world, not just here. The reality is that many of them are gonna need to have a down round. Everybody needs to understand a lot of what happened in the last couple of years was irrational, and we have to be pragmatic in how we move past it so that everybody understands that all stakeholders need to be taken care of in coming up with those kinds of scenarios.”
During his present go to to India, Taneja stated he was stunned by the absence of startups within the area of synthetic intelligence.
“If India’s gonna be globally competitive in this next software cycle, then you definitely wanna see the AI ecosystem developing here in a more robust way than what seems to be apparent to me,” he added.
Source: economictimes.indiatimes.com