3 Key Reasons To Bet Big On Indian Startups In FY24

The worldwide financial system is experiencing a period of instability because of significant factors such as the increasing interest rates, the recent downfall of the Silicon Valley Bank, and several other uncertainties related to the overall economy.

The past returns information on American venture capital indicates that 2023 will be akin to 2009, granting a highly profitable chance for investors seeking startup opportunities.

The decline in market values and the decision by prominent investors to reduce their investment activity are creating an opening for new investors in the Indian startup scene.

Have you experienced the rush of a roller coaster ride? The ups, downs, and twists keep you on the edge of your seat. The current status of the worldwide economy is just like that exhilarating ride. The state of events is unpredictable, unexpected, and intense. The stock market is unstable, interest rates are rising, and Silicon Valley Bank has plummeted out of nowhere. This macroeconomic situation is surely making every investor feel disoriented.

The most clever investors look beyond the confusion and commotion caused by changes in the market. To these investors, there are no distinct periods of market growth or decline, only profitable chances to invest, no matter what the economic circumstances may be.

Today we have an exciting opportunity to share with you - the possibility of becoming an investor in the rapidly growing Indian startup industry.

What's the reason for this timing, you might inquire?

We're going to examine the data that shows how the US Venture Capital performed during the period of 2008. The markets took a nosedive during this time and an intriguing trend surfaced...

The MOIC midpoint increased significantly in 2009, immediately following the year of economic decline, and has remained higher than that level ever since.

The MOIC acronym refers to the value returned by an investment. For instance, if the MOIC is 2x, it indicates a return of 100% on the initial investment.

With the recurrence of history in 2023, it is expected that startup investments will experience a comparable progression in the foreseeable future. Nonetheless, only the investors who are currently pouring money into startups will be able to duplicate these outcomes.

In this blog, we will delve deeper and discover three factors that could make the financial year of 2023-24 an opportunity for significant gains with Indian startups.

Market Correction: Valuations Drop

The current market correction has resulted in the reduction of estimated worth for various Indian unicorns. Noteworthy companies such as BYJU'S, Swiggy, Ola, Meesho, and OYO have encountered numerous declines in value. Despite the markdowns being recorded in investors' accounts, they have a widespread impact on valuation for all business stages.

Investing in a startup during a period of economic growth can lead to greater value and a smaller share of ownership, whereas investing at the present time would result in lower value and a larger share, with equivalent investment.

Let's say there was a startup, and it was deemed to be worth $10 million a year ago. Now, it's worth $7.5 million. This means that if an investor decided to buy $1 million worth of ownership in the company, they would own 13.33% of it, whereas before they would have only owned 10%.

The key is not to focus on reduced prices, rather it's important to gain entry to the appropriate bargains at cheaper rates.

This piece of advice emphasizes the significance of recognizing the appropriate bargains that come at discounted rates, rather than impulsively purchasing inexpensive investments.

More Deals Thanks To Turmoil: Geopolitics & Finance

Even though there wasn't much funding available, Indian venture capital had an incredible year in CY 2022. A total of 126 new funds, valued at $18 billion, were created during that year. And things are still looking up, as another $3 billion was added during the first quarter of 2023.

Many big investors have backed away from the market due to the uncertainties in the macroeconomy. It's been calculated that over $16 billion in capital remains in venture capitalist reserves, staying untouched and waiting to be used.

As soon as prominent investors step away, it creates chances for new investors to enter the market since progress and new ideas do not halt during an economic downturn, and entrepreneurs are still developing extraordinary goods.

This scenery means that emerging investors can secure more favorable deals and lower valuations.

Investing In Relationships With Founders Is Worthwhile

When the economy is struggling, creating strong bonds with company owners can bring significant benefits.

People tend to hold dear those who support them during difficult moments. During periods of economic decline, entrepreneurs are more inclined to engage in dialogue with investors and address their company-related predicaments.

Think about this: In the financial year 2022, India's top 200 startups invested a total of $25 billion but only gained $19 billion in return.

It is evident that the primary aim of Indian startups in the present day is to attain profitability. The most effective method of succeeding in investing in startups is to assist the founders in achieving their goals.

Investors are able to assist entrepreneurs in accumulating a significant amount of positive karma, which can lead to a flow of referrals that provide access to exclusive investment opportunities not found on other angel syndicates or platforms.

MoneyX: Accessing Insights, Deal Flow & Collaboration

If you're eager to take advantage of this amazing investment opportunity in startups based out of India, one great way to get started is by participating in MoneyX. This is the biggest event in India for Angels and Venture Capitalists and it will be held on July 20th, 2023 at The Leela Ambience in Delhi-NCR.

MoneyX is an exclusive gathering designed to influence the future of entrepreneurship in India by tapping into the national capital of the country. This event will create an opportunity for people to work together with over 350 top investors, including LPs, GPs, Angels, Family Offices, and Institutional Investors.

Discover the vital investment knowledge from India's wealthiest 1% investors in more than 20 informative sessions divided into two stages. Along with engaging panel discussions and presentations, participants will have access to MoneyX's advanced matchmaking system, utilizing artificial intelligence to create connections and cultivate relationships between both experienced and upcoming investors.

Take a leap towards the upcoming era of startup investments by joining MoneyX. Secure your entry now by reserving your spot today!