Biz time: Things to learn

Vijay C Roy in Chandigarh

Experts from northern region stress four factors: funding, scaling, execution and credibility. Sarvjeet Singh Virk, managing director, Finvasia says: “Funding will be the key issue followed by credibility which will peak as there is a fear among vendors as well as investors. Scaling of operation will matter hugely as many top institutes such as IITs and IIMs bar entry of startups in their campuses.” He sees mergers and acquisitions in 2017 also. For instance, Chandigarh-based Finvasia, a company offering services in asset management, investment banking, capital market advisory and currency hedging, has announced that it has closed a funding deal with some of the industry’s notable venture capitalists, where a majority of FDI stake is from Mauritius-based entity of Intrinsic Investments Ltd. 

Kunal Nandwani, founder & CEO, uTrade Solutions, says funding may get worse. A slow-down in economy post demonetization will pose a challenge for startups. He says with the US hiking rates, most fund houses would pull out from India and would invest in that country. “Curbing work visa by the US will also hamper the growth of Indian companies,” he added. 

“Investors are more cautious than ever because of many failed business models in grocery and food delivery segment,” says Arun Kumar, founder, Organo Fresh Solution (P) Ltd. Vineet Khurana, VP Operations, Chandigarh Angels Network (CAN), says the biggest and the foremost challenge would be sustaining a startup. “Me too” businesses would find the going even tougher, he said.

So, what do we do?

Sumeer Walia, director, Chitkara Innovation Centre, says robust mentoring programs are needed. That means looking for ideas as per market needs. “Seed funding comes next. This is essential for innovative and engineering startups ready with prototypes for industry linkage on a perpetual basis. 

Nandwani of uTrade Solutions says promoters have to focus on a sustainable business model and focus on profitability more than mere discounting stuff.

To gear up the challenges, Sumeer says startups are looking at options to outsource their work in countries like the Philippines, Malaysia, China and Taiwan. “You need to build a business that is unique and operationally profitable. Startups should work on building efficient processes to reduce their operational cost and also build a service that people need,” says Arun Kumar.