Flipkart chief warns startups of turmoil and funding crunch for an additional 12 to 18 months • TechCrunch

The funding winter for the startup ecosystem could proceed for an additional 12 to 18 months and the trade might need to grapple with a “lot of turmoil and volatility,” e-commerce big Flipkart chief government Kalyan Krishnamurthy has warned executives.

“That is going to be powerful subsequent yr. My estimate is that a variety of startup founders will hit the market between April to June subsequent yr, and that’s the second of reality for the ecosystem,” he stated at a gathering over the weekend organized by Indian newspaper Financial Occasions.

Sometimes a reserved and soft-spoken government, Krishnamurthy informed lots of of attendees that startup founders ought to embrace a down-round and restructure their companies. Many startup founders are usually not wiling to take a haircut on their earlier valuations in new funding deliberations, traders say.

Some startup founders imagine that they will be unable to draw and retain the expertise if a funding occasion instantly makes the workers’ present shares much less precious.

“In 2001, corporations noticed a 2x to 6x spike in valuation with some underlying progress and profitability assumptions for the following two to 3 years. I believe it rapidly grew to become clear that these assumptions are usually not going to play out,” stated Krishnamurthy, describing the enhance to startup funding in India final yr.

Indian startups raised a document $39 billion in 2021 as traders aggressively regarded to double down in rising markets. In distinction, because the market reserved its place earlier this yr, funding within the quarter that resulted in September slid under $3 billion.

And which means an introspection on what must be finished to outlive, he stated.

Krishnamurthy, who beforehand labored on the funding store Tiger World, famously helped architect Flipkart lower its workforce by 30% 5 years in the past to assist the agency develop into extra environment friendly. “We grew from there, so it’s not an issue,” he stated.

Walmart-owned Flipkart, final valued at $37.6 billion, put a hiring freeze earlier this yr and halted its acquisition spree, which earlier noticed it spend about half a billion {dollars} to broaden into on-line healthcare and journey classes. The agency — which counts SoftBank, Tiger World, GIC, Canada Pension Plan Funding Board, Qatar Funding Authority, Tencent and Franklin Templeton amongst its backers — doesn’t plan to go public for not less than a yr.