In the ongoing tech winter, Siddharth Pai, founder of 3 One 4 Capital, said that scarcity is one of the strongest drivers of innovation. Start-ups have shown that to a large extent. India will bring in a significant amount of innovation that will be spread across the globe. When you have no resources, you become lazy and competitive as you become a champion for innovation. The Business Today Tech Today Congress presented a session titled Catching a Cold: Tech Winter. Weathering the storm today with panelists including Pai, Mahankali Srinivas Rao, CEO T-Hub and Anas Rahman Junaid, founder MD, Hurun India. The panelists discussed the challenge and strategies for weathering the tech winter storm and the opportunities for entrepreneurship, innovation and emerging stronger in the face of adversity.
I think there are massive untapped opportunities in several sectors such as deeptech, spacetech, healthcare, fintech and insurance, he said. I think there are opportunities for good businesses to be built. Talking about the ongoing tech winter and current implications, Pai said, Valuation, as I see, is a function of fundamentals, potential and market sentiment. Market sentiment is a macro factor that has adversely affected the startup ecosystem to a large extent. Federal governments worldwide ended up printing a significant amount of money in 2020 and the interest rate came down to zero. Large institutions then began chasing the alpha. To generate this sort of alpha fixed income giving zero yields, the stock market was significantly dislocated because the sentiments were bad. Crypto, the hottest asset, started emerging as the hottest sector, followed by private companies. And that fixed income has increased in terms of yield, we are seeing massive pullback of capital from these particular areas, he said. Consequently, the market sentiment factor has had a profound effect on the startup ecosystem. Pai, however, believes that every winter is followed by spring and he is fairly certain that the spring is in the offing. The startups that come out of this will be far more resilient than actually what we have seen in the past, he said. Will tech winter be followed by spring? I think push now is to get your unit economics in place and figure out if there is a path to profitability, he said. We're getting some sense of sanity back. Anas Rahman Junaid, discussing about the role of governance in the startup ecosystem, said there was a fear of missing out earlier when it came to signing a deal. Now we have the flexibility to take time to do the due diligence or even backout if it doesn t work out. One good thing that has happened for both investors and startups that the DD is more extensive and there is much better awareness in terms of how to price innovation. This is the moment for India: CEO David Reed, Vedanta Foxconn Semiconductor CEO, said during Tech Today Congress Live.
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