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2015 for start-ups: Of exuberance, correction, and rationalisation

Business Standard 

Click on graphic Click on graphic The dream run for that began in mid-2014, continued till mid-2015, driven by excess liquidity and a FOMO (fear of missing out) effect. Hedge funds, some of whom made big bets on Chinese internet firms and won, and others who missed out on them, raced to acquire a slice of the Indian consumer internet pie. These drove valuations and saw raising $5.70 billion in 2015, with many raising fresh rounds of money in a span of six to eight weeks. Investors were already concerned as valuations were ahead of fundamentals, and they began to slow down from May-June.

The sentiment thus, changed: Investors were no longer in a hurry to close deals or write big cheques. The same investors who were asking to chase growth were now asking for unit economics. As it became clear that fundraising will become tougher, began to rationalise (Housing, Foodpanda, Zomato, PepperTap) and conserve cash to stay longer in the game. Here's a snapshot of what 2015 meant for start-ups

First Published: Wed, December 30 2015. 00:21 IST