Startups need to adopt a more frugal business model, say top experts at GVFL’s Annual Investors Meet
Ahmedabad (Gujarat) [India], March 29: Amid challenging economic conditions, startups and businesses must relook at their business models and adopt more frugal business practices to attract investor interest, experts said at the GVFL Annual Investors Meet 2023.
“The times are challenging. Money is there, but funds are going to be choosy in the startups they invest in. Startups will have to relook at their revenue models, adopt more frugal business practices, reduce expenses, and focus on profitability to tide over the crisis,” Kamal Bansal, MD, GVFL said in his welcome address. Bansal also shared GVFL’s future plans saying it will launch its 10th fund very shortly. He said that with the ‘Gujarat Young Entrepreneurs Venture Fund’ announced by the Government of Gujarat in the budget, GVFL hopes to catalyse investment of more than Rs. 3,000 crores in startups in Gujarat in three to five years.
The GVFL Annual Investors Meet brought together more than 250 startup founders, investors, incubators, institutional investors, funds, and other stakeholders to discuss investing trends and other relevant topics. The day-long meet saw panel discussions on upcoming sectors and investing trends, lessons learnt in startup investment & way forward, and risks and rewards of seed-stage investments. Representatives of Speciale Invest, Jupiter Capital, JSW Ventures, Omnivore Partners, Carpediem Advisors, IVY Cap Ventures, Blume Ventures, Mumbai Angels, CIIE.co, Venture Garage, and Iroller Capital participated in the panel discussions.
During the meet, experts stressed on finding business models that will cater to the middle and the bottom of the pyramid and not just the top of the pyramid. They also emphasised the need for innovation, ideas that help in solving real-world problems, and the right execution. Delivering the keynote address, Piruz Khambatta, CMD, Rasna Group, urged startups to find innovative solutions that reach the grassroots level and help in promoting inclusive growth and nation-building.
In his address, Sunil Parekh, who is advisor to leading corporates and works extensively in promoting startups, said, “Indian startups have had an enormous impact on us as consumers and citizens, but have tech startups and unicorns developed any innovative technologies, done some foundational technological research? The answer is a big no.” He also said that India is home to 91,000 registered startups, 108 unicorns, and the third-largest startup ecosystem in the world. He, however, noted that almost no unicorn in India has been formally incubated in an incubator, and called upon the audience to deliberate why the most successful ventures are outside the formal incubation ecosystem.
In his remarks, Mihir Joshi, President, GVFL said, “There is certainly a cash crunch. Investors are being cautious. But is this the funding winter? No, we are back to normal from the unsustainable, high startup valuations had touched.”
Nine startups, in which GVFL is an investor, also made presentations about their business, their growth, and their plans. The startups include Zero Cow Factory, Video SDK, Saarthi Pedagogy, Zoivane, Pivoting, PetPooja, All that Dips, Qarmatek and Eronkan.
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