In funding winter, startups strive for profitability

Startups are striving for profitability due to the impact of the funding winter. Meesho, MobiKwik, and Oyo are among the startups that have reported profitable quarters in FY24. Meesho has achieved profitability since July 2023 through a focus on cost optimization and operating leverage.

More startups are expected to become profitable in the coming months as investors and analysts anticipate a shift. The decline in investments into startups, particularly late-stage or bigger startups, has made profitability critical for attracting investments. Representative image: IANS MUMBAI: Call it the impact of the funding winter nudging investors to take a stricter look at companies’ financials before writing cheques to them, startups are striving to achieve profitability .

Meesho , MobiKwik , Oyo are among startups which managed to report profitable quarters in FY24. Meesho, for instance, turned profitable since July 2023 and claims to have sustained it thus far. “Over the past two years, our focus on profitable growth through cost optimisation initiatives, combined with operating leverage, has significantly enhanced our profitability,” the company said in a recent blog post.

More startups are expected to turn profitable in the coming months, said investors and analysts. After a record funding of $42 billion that startups attracted in 2021, investments into startups declined to a seven-year low of $8. 2 billion in 2023.

Late-stage or bigger startups bore the brunt of this decline, with funding having dropped to $4. 2 billion during the year from over $15 billion in 2022, estimates shared by market research firm Tracxn showed. “Profitability or the path to profitability is absolutely critical for any startup which is not profitable today or for any new startup that comes up.

. . And companies which have turned profitable need to ensure that they maintain profitability.

Only profitable companies will be able to attract investments. Due diligence by investors into startups will be deep – there will be questions on gross margins, unit economics, cash flows and companies will have to be prepared for that,” said Padmaja Ruparel, president at Indian Angel Network (IAN). FOLLOW US ON SOCIAL MEDIA Visual Stories Previous 10 Most Affordable Cities in India to Buy a House business Most Visited Monuments in India business The Pros and Cons of Investing in Value Stocks business Investing in Small-Cap Stocks: Top 10 Tips for Absolute Beginners business 10 Ways to Earn Money Online by Selling Physical Products business Richest Cricket Players Across the World business 10 Things You Didn’t Know About Warren Buffett’s Investment Process business Priyanka Chopra Net Worth: Know How Rich is Global Actress business Top 10 Benefits of Investing in Small-Cap Stocks business 15 Best Tax Saving Schemes in India business Next 1 2 3 Elections Chhattisgarh CM News MP CM News Rajasthan Election Results MP Election Result 2023 Chhattisgarh Election Result Mizoram Election Result TOP TRENDS Jeffrey Epstein Aditya L1 Mission Horoscope Today India squad for Afghanistan West Bengal ED Raids T20 World Cup Schedule.