10 Min Read on Recession On Indian Startups

Recession Impact On Indian Startups

"It's a recession when your neighbor loses his job; it's a depression when you lose yours" — Ronald Reagon

->> Edtech had its honeymoon period during Covid with increasing fund flow. Now with the firing spree, its majorly correcting its "over hiring" to the normal culture of students being back to schools and colleges. But Edtech is a huge market with more growth in future and therefore, even in recession, good models would monopolize. Not just that, some new players can enter and make a huge impact due to more sustainable models and some big giants falling and leaving a void behind.

->> Angel Deals may still be there while Venture deals may decline. Angel deals being something done on the ground of personal connection, pain points and being more open to take risk while Venture Deals having risk aversion.

Would this mean an end to stay afloat? Interestingly, after being a stock market investor, I understand one thing, Investors view Bad Market times or Bearish Markets as opportunities. Especially Long term Investors. So, the money will be there. 

Challenge can only be for Startups struggling more to get this, proving their models (a mechanism which is not very popular amongst startups as many startups have raised series C & D without being profitable). 

->> The coping mechanism is still something that would be clear once we are in the situation. As of now, here are something a lot of startups are doing to prepare themselves

1. Cutting Costs 

2. Delaying Bold or risky projects

3. Improving Unit economics and Profitability

4. Raising Funds to build a runway sooner before its too late

All in all, Startup is a ride. And any other business is. So be it Covid, Recession or Climatic Change, One or the other challenge would always be there. 

"Startups build themselves in spite of Challenges and not in the absence of it"

Remember : Apps and websites were built in an era when Internet and Mobile wasn't accessible to most people.