In a positive outlook for the Indian startup ecosystem, V Jayasankar, the managing director at Kotak Investment Banking (KIB), anticipates the end of the funding winter in 2024. Jayasankar projects that approximately 15-20 unicorns are poised to go public in the next 1-2 years, injecting renewed dynamism into the IPO market.
Addressing the media during KIB’s annual roundup, Jayasankar expressed confidence in the resumption of public market activity, stating, “Equity worth $10 Bn is expected to be raised from the IPO market in the next 12-24 months. Over 10 internet decacorns will emerge by 2025-end, and at least two to three large conglomerates will be established.”
The KIB managing director envisions substantial growth in the internet segment, predicting nearly 20 to 30 mid-to-large size mergers and acquisitions in the next 12-24 months. This optimistic outlook follows a period of subdued merger and acquisition activity attributed to increasing interest rates and geopolitical tensions.
The funding landscape witnessed a decline in 2023, as indicated by Inc42’s “Indian Tech Startup Funding Report 2023.” With total startup funding exceeding $10 Bn, the figure represented a 60% drop from 2022 and a significant 76% fall from the peak in 2021. Investor participation also decreased by 37%, with over 1,500 startup investors involved in 2023 compared to more than 2,400 in 2022.
Jayasankar remains upbeat about the future, affirming, “Funding winter will end by 2024 with the return of public market dynamism. Large internet IPOs will catalyze across-the-board deal-making.”
As of March 2023, India boasted five decacorns – BYJU’s, Swiggy, Flipkart, PhonePe, and Nykaa. The country is home to a total of 112 unicorns, with a combined valuation exceeding $347 Bn. The anticipated IPO debuts of new-age internet companies, including Ola Electric, FirstCry, Awfis, and MobiKwik in 2024, further contribute to the positive sentiment in the Indian startup landscape.
