SUMMARY
Speaking at Inc42’s Fintech Summit 2022, Kumar said a startup’s funding requirements and a VC firm’s exit cycle should be in sync with each other
Giving SALT’s example, Kumar said that the startup doesn’t believe that it can raise cash easily and then burn it on such endorsements
Indian startups raised $18.6 Bn in H1 2022, 41% less than $31.6 Bn raised in H2 2021
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Taking a dig at startups seeking celebrity endorsements, Shinjini Kumar, cofounder and CEO of fintech startup SALT, said she has never understood the logic behind raising capital and spending it on cricketers and film stars.
Speaking at Inc42’s Fintech Summit 2022 on a panel about the economic downturn and how fintechs can survive it, Kumar said that a startup’s funding requirements and a VC firm’s exit cycle should be in sync with each other.
“Therefore, that’s how you plan, that’s how you are in sync. You are not in sync when either you are on the extreme where you don’t need capital but you raise it and give it all to cricketers and film stars which is something I’ve never really understood,” Kumar further said.
Giving SALT’s example, Shinjini Kumar added that the startup doesn’t believe that it can raise cash easily and then burn it on such endorsements.
Kumar’s comments come as the country’s startup ecosystem has seen a decline in funding over the last few months.
In the first six months of 2022, Indian startups raised a cumulative $18.6 Bn, with fintech accounting for the biggest chunk at $3.4 Bn, according to data from DataLabs by Inc42. However, this was over 41% lower than the $31.6 Bn raised by the startups in July-December 2022. For fintech startups, the decline was almost the same – 40% from H2 2021.
This reduction in funding resulted in Indian startups laying off 11,168 employees during the first six months of 2022, as per Inc42’s Indian Startup Layoff Tracker. Fintech startups also didn’t remain unaffected, with four fintech startups laying off 349 people in total so far.
Indian startups have seen increasing participation from celebrities such as cricketers and Bollywood personalities as an investor than an endorser. According to an Inc42 report, the likes of Virat Kohli, Sachin Tendulkar and 15 other current and former cricketers are active investors in Indian startups.
Another Inc42 report mentions 22 Bollywood personalities with a stake in Indian startups, including the likes of Varun Dhawan, Alia Bhatt, Deepika Padukone and others.
Indian startups have been spending big on endorsements, especially for big-ticket events such as IPL 2022 and FIFA World Cup 2022.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.