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Many unicorns got their valuations destroyed because of shortcuts: Marico’s Harsh Mariwala

Marico Chairman Harsh Mariwala was speaking at the launch of Ascent Foundation’s Delhi Chapter. Ascent is a not-for-profit by Mariwala founded in 2012 to identify high-potential, growth-stage founders and enable them to grow their enterprise.

Many unicorns got their valuations destroyed because of shortcuts: Marico’s Harsh Mariwala

Monday March 18, 2024 , 3 min Read

The last year has been challenging for the Indian startup ecosystem as both funding and business slowed, valuations shrunk, and job cuts made headlines. According to a report by early-stage venture capital firm Orios Venture Partners, nine Indian unicorns lost 49% value on average in 2023. Edtech firm BYJU'S was among the biggest losers in the pack, with an 86% markdown in its valuation from $22 billion, the report stated.

“Many unicorns in the last few months have had their valuations destroyed because they tried to take some shortcuts…so governance, and culture from the early days is critical,’ said Harsh Mariwala, Chairman of Marico, that has popular and time-tested products in its kitty–such as Parachute hair oils and Saffola cooking oils. He was speaking at the launch of Ascent Foundation’s Delhi Chapter. Ascent is a not-for-profit by Mariwala founded in 2012 to identify high-potential, growth-stage founders and enable them to grow their enterprise.

Shortcuts are never the path to growth, not even in the early stages, Mariwala emphasised. “Once you’ve built a culture of shortcuts, you can’t one day suddenly decide to change it.” Mariwala didn’t name any specific startup. Last month at the Mumbai Tech Week, Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar said that BYJU’S had tried to grow too fast without creating the necessary rigour and the corporate discipline, and everyone should take that as a lesson,

Other than BYJU’S, the startups with the big markdowns in 2023 include Pharmeasy (90% to $5.6 billion), OYO (72% to $9.6 billion), Pine Labs (38% to $5 billion), Ola (35% to $6.7 billion, Swiggy (34% to $10.7 billion), Gupshup (32% to $1.4 billion), Meesho (10% to $4.9 billion), and Eruditus (9% to $3.2 billion), the Orios report showed.

Basics first, all else follows

Mamaearth Co-founder, Ghazal Alagh, who was also speaking at the event in Delhi told the room full of entrepreneurs to always focus on the basics before everything else. “To build a sustainable business it's very important to focus on the basics, rest follows like valuation, funding and so on,” she said. While commenting on the importance of building a personal brand for founders, she was of the opinion that it shouldn’t come as a pressure. “Personal branding shouldn't be an additional pressure. Build your business first, that's the priority,” she said.

The event also saw Bira91 Founder Ankit Jain and Boult Co-founder Varun Gupta share learnings from their journey with the audience. “In an environment where consumers can change overnight it is that willingness to learn every day that really helps you survive,” said Jain, while Gupta emphasised the importance of rigour and customer obsession.

About Ascent

Ascent is a community where high-potential entrepreneurs converge to enhance their leadership skills and propel their businesses forward. It forges curated clusters of highly compatible and non-competing entrepreneurs called ‘Trust Groups’. These groups serve as a sounding board, meeting monthly for structured knowledge sessions and events where members benefit from a safe space to express themselves without fear of judgement. “The heart of the success of Ascent lies in two things - intent and time. The intent to support the entrepreneurial community, and taking out time for each other,” said Priyanjali Mariwala, Lead Director of Ascent.