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Why Biggies have started loving Startups ?

Why Biggies have started loving Startups ?

In the recent years the marketplace has taken a major shift. Starting up is no longer considered an unemployed youth’s dream castle. We find lesser people laughing at us when we share our thoughts of being the next Bezos or Jack Ma. Starting up is undoubtedly the next big thing which has been attracting the eyeballs of the biggies as well. The current trend is observed to have seen the big names investing into these startups that are becoming the craze for people. There are lot of reasons that are attracting these large organizations to fund the startups and remain stable in terms of their brand value. This article talks about Why Biggies have started loving Startups ? 

Reason 1:  Startups are bringing innovations to the market

Why Big Technology companies loving startups ?

It has been observed that everyday there are different kinds of startups that are coming up. These startups offer unique products and through them the whole world is able to perceive many new innovations.

The working schedule of these big organizations is a traditional one where the time slot of 9 to 6 operates which makes it very difficult to bring out the newness in their product range and development in terms of business models.  Here the startups overshadow these biggies as they bring out new and attractive product range for the consumers. This led the biggies to invest in these startups which act as a means of outsourcing for the biggies.

This is the prime reason that Ratan Tata invested in the online furniture startup Urban Ladder. The Startup offers more than 30 categories of unique products that are further sub divided based according to the requirement of the customer. This distinctive offering by the Startup is attracting the investors to fund.

Bangalore based Chumbak which offers quite distinctive “Indian inspired “merchandise got funding due to its product range.  Their products focus on the lifestyle of people. Ranging from tech accessories, wallets, bags, pouches it has a wide range of souvenirs.

Reason 2: Startups are growing at a faster pace

Startups are attaining the progress in their business at a much faster pace as compared to the big companies with step growth level within the startups. They have a strong acceleration towards expansion that builds a trust value as well as a better reach among the clientele.

This is the reason that the restaurant discovery service Startup Zomato had gained the new round of funding from its investors. The food based startup had performed excellently and had progressed at a much larger scale from the first round of funding provided to it by Info Edge (Naukri.com). This has resulted into exponential growth for Zomato – they have not been able to reach to more than 100 cities in India, but has acquired companies worldwide.

Reason 3- Startups helps in gaining market economy

Startups are the building blocks for any growing economy. The trend is showcasing that the Startups are creating their own market force and bringing positive effects in the market economy.

Big companies now following the method of employing lesser people to keep their working smooth and flexible. Whereas in this scenario the startups are hiring at a major level. By employing the freshly passed college graduates startups are increasing their workforce. As there is flexibility in the working culture of startups the employees are more productive in terms of employees in large organizations.

The startups employees are multi-taskers and can perform a numerous tasks at a shorter time period and at a much smaller pay. This is one such reason that the biggies are trying to invest in these startups as they would be able to achieve their goals and growth in their business through the startups. As the startups are furling the economy of the country the investors are trying to tie up with them through funding and receiving a positive impact on their career.

Conclusion

Hence the funding galore is based on the three major reasons that are making the biggies to get attracted towards the startups. The creative splurge with which the startups bring out their innovative products are making a boom in the markets and are bringing back the lost economy. Startups are acting as a fueling tool for the market economy.  Hence their progress and growth is making them a major attraction for the big players.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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Alok Patnia founded Taxmantra.com, an expert in tax advisory & compliance. He is a Chartered Accountant having prior exposure with Ernst & Young & KPMG.

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