Startup Landscape Unveiled: Fintech and Gaming Weather Challenges, Tech IPOs Soar, and Secondary Deals Signal Resilience
In the dynamic tapestry of startup trends for 2023, notable shifts and challenges have unfolded, shaping the trajectory of diverse sectors.
While edtech grappled with ongoing challenges, fintech and gaming emerged as the new focal points. The Reserve Bank of India’s stringent guidelines for BNPL companies, such as ZestMoney and Paytm, prompted a strategic pause in their future plans. Simultaneously, the introduction of a 28% GST rule for real money gaming platforms led to the closure of several gaming-focused ventures, with repercussions including mass layoffs. As the government scrutinizes tax liabilities in the gaming sector, the high-revenue and profit-intensive gaming market, expected to reach $5 billion by 2025, anticipates navigating through challenging times.
The IPO landscape witnessed a resurgence, with 2023 marking a notable entry of startups onto the stock exchange. Following the footsteps of 2021’s trailblazers like Paytm and Zomato, this year saw MamaEarth, ideaForge, Yudiz, Zaggle, and Yatra Online making their stock market debut. Companies like Ola Electric, FirstCry, and Awfis further fueled the momentum by filing their draft red herring prospectus with SEBI. Despite a robust IPO environment, certain startups, including Droom, OYO, boAt, Snapdeal, Mobikwik, PharmEasy, and Digit Insurance, deferred their IPO plans after filing DRHP.
Navigating a challenging environment, secondary deals emerged as a resilient trend, exemplified by SoftBank’s strategic moves in the market. Notably, SoftBank, a major stakeholder in FirstCry, executed two share sales in the past four months, indicating the continued appetite for secondary deals. Similar trends were observed with SoftBank-backed ventures Lenskart and Meesho. Growth-stage startups such as Perfios, Atomberg, GIVA, Mintify, and Credgenics showcased a positive outcome for 2023 by engaging in secondary deals or facilitating partial exits for their early backers.
In this intricate interplay of challenges and resilience, the startup ecosystem in 2023 unfolds a narrative of adaptation, strategic recalibration, and the unwavering spirit of innovation.