A teen Telangana-based entrepreneur, Saikiran founded SCOPE at the age of just 17. He is currently a first-year BTech Data Science student at Manipal University, Jaipur. Even before crossing the threshold of his teen years, Saikiran is already leading a prosperous professional career. He completed his Junior CEO program certified by Brown University. He also received the monumental Global Kids Achievers Award for developing SCOPE’s avant-garde application. He was also one of the top-100 students across India selected by Google to visit their office.
Over the last two years, the euphoria surrounding the investment spree in startups ranging from fintech, Web 3, e-commerce and others have taken the country by storm. In fact, as per reports, Indian startups raised USD 42 billion in 2021, which is a significant uptick from USD 15 billion in 2020. People started talking about the new-age internet/startup economy. The 1999 history repeated itself, and companies that were unprofitable but had dot-com in their names started emerging as the golden bird of this internet/startup economy.
Many people, who weren’t even expert investors, wanted to become a part of this ecosystem because they saw acquaintances gaining massive profits. In addition, investing in cryptocurrency materialised as the buzzword of the modern century. Everyone and anyone who could get their hands on it were trying to leverage this fast-profit route to make big money. But we all know how it ended. The Fear Of Missing Out (FOMO) investment bubble came crashing down.
First, the cryptocurrency market witnessed more than USD 300 billion wiped out in just a matter of seven days. This was the largest crypto market crash since May 2021. In fact, Bitcoin plummeted to its lowest point since 2020. And then came the funding winter for Indian startups that resulted in layoffs and cost-cutting. According to market experts, this funding winter will continue to add to the woes of Indian startups who were until a few months back celebrating the record-breaking feat of USD 42 billion funding.
How does the market slow-down allow investors to rethink their strategy?
In the last two years, there were several instances when questions were raised if the feeling of FOMO is fueling the startup funding rounds. In fact, a leading investor on a TV show also gave a statement that he invested in many startups due to FOMO. Clearly, the investors were not backing high-potential and valuable startups but just trying to become a part of this race. However, with the recent events (crypto meltdown and funding winter), investors are once again forced to look for startups that have the prospects of creating value. In fact, this funding recession situation could have been avoided if the investors had made decisions smartly and practically instead of following the FOMO trend.
What does the future hold?
Taking lessons from recent events, investors have become mindful of their funding decisions and process. Instead of simply living in the FOMO bubble, they have slowed down the rampant funding process. Market investors are taking meticulous measures for making sound startup investment decisions. Simultaneously, they are also prepping for the downturn of the market crash owing to the inflation and global crisis factors.
While this may sound like a bad time for startups, this investment slow-down will strengthen the startup ecosystem in the long run. Instead of just adding more startups with funding but no clear vision or mission, investors will now hopefully back entrepreneurs that can add value to the entire startup ecosystem. The FOMO bubble has exploded, but it has indeed opened doors for investors and startup stakeholders to make disciplined investment decisions in the future.