India's startup bubble has already burst# JobHunting - 待字闺中
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http://money.cnn.com/2016/10/13/technology/india-startup-bubble/index.html
India's great startup boom has come to an end.
by Huizhong Wu and Sara Ashley O'Brien @CNNTech
October 13, 2016: 11:35 AM ET
After a sustained funding frenzy, investor enthusiasm for the country's tech
startups has fallen sharply this year. Weaker firms are laying off
employees and some have closed up shop altogether.
Startup funding in the second quarter plummeted to $583 million from its
recent peak of nearly $3 billion in late 2015, according to CB Insights. It'
s a sharp turnaround for a sector that attracted more than $8 billion last
year.
"We've already felt the effects of what that bubble would be," said Arjun
Malhotra, the co-founder of Indian startup incubator Investopad. "A lot of
the companies that were high performing, they are crashing now."
The slowdown has occurred despite favorable conditions: The broader Indian
economy is booming, and inflation is low. Global investors are on the hunt
for the next Facebook (FB, Tech30) or Amazon (AMZN, Tech30).
With 1.3 billion citizens and a surplus of skilled IT workers, Indian
startups proved irresistible to many investors. The success of homegrown e-
commerce darlings Snapdeal and Flipkart, and ride-sharing app Ola, added
credibility.
Yet there is a simple explanation for the reversal: Investors say India's
tech sector experienced a classic bubble, similar to the one that rocked
Silicon Valley when it burst in 1999.
"I think India is going through its first bubble," said Kashyap Deorah, a
former Silicon Valley entrepreneur who now runs a startup in Delhi. "It is a
bubble and it is normal."
indian startup funding
Already, the downturn has claimed some high-profile victims.
Peppertap, a grocery delivery app financed by Sequoia Capital and Snapdeal,
shuttered its delivery operations and "pivoted" to logistics. Another funded
grocery delivery startup, Grofers, shut its operations in nine cities
across India.
In late 2015, Indian unicorn Zomato laid off about 300 staffers.
Young techies have been among the hardest hit. Some university graduates
even had job offers rescinded by tech startups, according to Gurumurthy
Balasubramanian, the chief placement officer at Birla Institute of
Technology and Science.
"Six or seven companies have done this to our students and students from [
the Indian Institute of Technology]," he said. "In the last six months, the
last nine months,
Some industry insiders believe the crash is a needed wake-up call.
"I think it's better for the market now that startups are not getting money
mindlessly," said Abhishek Gupta, the chief operating officer at incubator
TLabs. "What I see [now] is money being well spent."
Foreign investors agree that there are still opportunities worth exploring.
"Quite honestly, we expected this to happen," said Sumant Mandal, managing
director at March Capital, a U.S.-based investment fund based in Santa
Monica, Calif. "There's definitely a slowdown."
Mandal has been investing in Indian startups for over a decade, backing
electronic payments firm BillDesk and online auto classifieds company
CarTrade. March Capital invests in one or two big deals in India each year,
representing about 20% of its overall fund.
"I don't think there's any doubt that the market is going to be an important
one," Mandal said.
CNNMoney (New Delhi)
First published October 13, 2016: 11:35 AM ET
India's great startup boom has come to an end.
by Huizhong Wu and Sara Ashley O'Brien @CNNTech
October 13, 2016: 11:35 AM ET
After a sustained funding frenzy, investor enthusiasm for the country's tech
startups has fallen sharply this year. Weaker firms are laying off
employees and some have closed up shop altogether.
Startup funding in the second quarter plummeted to $583 million from its
recent peak of nearly $3 billion in late 2015, according to CB Insights. It'
s a sharp turnaround for a sector that attracted more than $8 billion last
year.
"We've already felt the effects of what that bubble would be," said Arjun
Malhotra, the co-founder of Indian startup incubator Investopad. "A lot of
the companies that were high performing, they are crashing now."
The slowdown has occurred despite favorable conditions: The broader Indian
economy is booming, and inflation is low. Global investors are on the hunt
for the next Facebook (FB, Tech30) or Amazon (AMZN, Tech30).
With 1.3 billion citizens and a surplus of skilled IT workers, Indian
startups proved irresistible to many investors. The success of homegrown e-
commerce darlings Snapdeal and Flipkart, and ride-sharing app Ola, added
credibility.
Yet there is a simple explanation for the reversal: Investors say India's
tech sector experienced a classic bubble, similar to the one that rocked
Silicon Valley when it burst in 1999.
"I think India is going through its first bubble," said Kashyap Deorah, a
former Silicon Valley entrepreneur who now runs a startup in Delhi. "It is a
bubble and it is normal."
indian startup funding
Already, the downturn has claimed some high-profile victims.
Peppertap, a grocery delivery app financed by Sequoia Capital and Snapdeal,
shuttered its delivery operations and "pivoted" to logistics. Another funded
grocery delivery startup, Grofers, shut its operations in nine cities
across India.
In late 2015, Indian unicorn Zomato laid off about 300 staffers.
Young techies have been among the hardest hit. Some university graduates
even had job offers rescinded by tech startups, according to Gurumurthy
Balasubramanian, the chief placement officer at Birla Institute of
Technology and Science.
"Six or seven companies have done this to our students and students from [
the Indian Institute of Technology]," he said. "In the last six months, the
last nine months,
Some industry insiders believe the crash is a needed wake-up call.
"I think it's better for the market now that startups are not getting money
mindlessly," said Abhishek Gupta, the chief operating officer at incubator
TLabs. "What I see [now] is money being well spent."
Foreign investors agree that there are still opportunities worth exploring.
"Quite honestly, we expected this to happen," said Sumant Mandal, managing
director at March Capital, a U.S.-based investment fund based in Santa
Monica, Calif. "There's definitely a slowdown."
Mandal has been investing in Indian startups for over a decade, backing
electronic payments firm BillDesk and online auto classifieds company
CarTrade. March Capital invests in one or two big deals in India each year,
representing about 20% of its overall fund.
"I don't think there's any doubt that the market is going to be an important
one," Mandal said.
CNNMoney (New Delhi)
First published October 13, 2016: 11:35 AM ET
