Around last year this time, unicorns (essentially tech-focused start-ups with a valuation of $1 billion or more) were popping up at a fast clip in India. The rush to list on stock exchanges was also unprecedented in the start-up universe till early this year. Raising fresh rounds of funds from marquee international investors was never easier for internet entrepreneurs. However, things have changed dramatically over the past few months and it is worth evaluating if start-ups can be the engine of growth in India as many believed. Since a majority of the start-ups depends on venture capital money, international disruptions and vagaries have a direct impact on the ecosystem. This was also true in the case of the dotcom bust at the turn of this century and during the financial crisis of 2008. While the overall commentary suggests that the current upheaval as a result of the crash in US tech stocks, increasing interest rates, China crisis, and Russia-Ukraine war may not be as bad as the dotcom debacle of 2001, uncertainty has increased significantly for start-ups.
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First Published: Sun, July 10 2022. 21:30 IST