58 pc founders believe Indian IPOs are realistic exit route: Report

While quick commerce was voted as the most over-hyped sector, healthtech was chosen as the most under-hyped sector, according to InnoVen Capital's survey of 100 founders.

Around 58 percent of startup founders believe getting listed on the stock exchanges is a realistic exit route, compared to 30 percent in 2020, according to InnoVen Capital's Startup Outlook Report 2022.

This acceptance comes after food aggregator Zomato and Falguni Nayar-led Nykaa had a blockbuster listing last year. While Nykaa gave its investors great exits, Zomato's successful listing set the tone for the entire startup ecosystem.

“2021 will be remembered as the year when the Indian venture ecosystem hit an inflection point. A record $38 billion of capital was invested into startups. Perhaps the most promising aspect was the IPO story, with Zomato and Nykaa leading the way," said Ashish Sharma, Managing Partner, InnoVen Capital India.

With the funding frenzy that led to 44 startups entering the unicorn club in 2021, 92 percent of founders find the fundraising ecosystem to have become much more favourable, compared with the 72 percent in 2020.

About 75 percent founders believe the funding ecosystem will be even more favourable in 2022.

For the report, InnoVen Capital conducted a survey among 100 founders, operating in ecommerce, logistics, healthtech, agritech, consumer brands, and fintech, among other sectors. The venture debt firm entered India in 2008 and has backed startups including food delivery aggregator Swiggy, logistics player BlackBuck, Cure.fit — now acquired by Tata Digital, and last-mile delivery aggregator Shadowfax.

Ashish Sharma, Managing Partner, InnoVen Capital

The survey also found quick commerce, where aggregators deliver products within 10-30 mins, was considered as the most over-hyped sector, while healthtech was voted as the most underhyped sector.

Zepto, which started operating last year, managed to raise $229.3 million in a matter of months from Y Combinator, Nexus Venture Partners and Glade Brooke Capital Partner, among others. The 10-minute delivery player is building a war chest against established players including Swiggy's Instamart, Reliance Retail-backed Dunzo, and Blinkit (earlier known as Grofers).

As the money continues to pour into the Indian startup ecosystem, focus on growth continues to take center stage compared to profitability. Around 86 percent of growth and late-stage founders were focused on growth compared to 80 percent early-stage founders.

Edited by Kanishk Singh