During the ongoing funding winter, several internet majors such as Paytm, Policybazaar parent PB Fintech, Flipkart failedd to control expenses in FY23. Horizontal omnichannel retailers such as Nykaa, Mamaearth parent Honasa Consumer and FirstCry also saw both employee expenses and marketing costs rise anywhere between 23% to 55% during FY23.
Since 2019, tech start-ups have collectively raised $70 billion in funding, states Nasscom-Zinnov Report 2023. Around 60% of start-up founders reported an increase in revenue and profitability last year
The current downturn comes after the dream run of 2021 when startups saw a hiring spree with massive pay packages, lucrative stock options, and exotic perks such as lavish joining kits, outings and weekend parties, health club memberships, and mindfulness and meditation sessions to attract and retain top talent.
“The (ongoing) funding winter is a blessing in disguise. Over the last few years, a lot of money has come into the market - creating a lot of value as well as some fat. With this funding crunch now, I believe, the fat will get melted - resulting in a much fitter start-up ecosystem in India," said Bahl at the Business Today India @ 100 event on Saturday.