Hey 👋 Everyone Jay here
In recently times u might have seen news of massive layoffs that many startups are doing . With these u might also have heard that funding wouldn’t be easily available now as it was available in last 1 to 2 years
Let’s give u a whole catchup of what’s happening with Startup Ecosystem in this post.
Let’s get started
On March 2020 coronavirus hit india . Overnight everything went online like schools , colleges , offices etc etc
This gave massive boom to all Edtech Startups like Byjus , Vedantu,Unacademy, etc etc
And all these startups were in radar of Venture capitalists and were given huge amounts of funding just on basis of growth and not profitability of these businesses. 📈
And this trend continued from 2020 to 2021 were not only edtech startups although startup of almost every sector raised a lot of funding and entered Unicorns List in India 🦄
Everyone in Ecosystem was focusing on growth of these startups at any cost rather than profitability. Cause most of these startups aren’t generating any profits and instead are generating losses .
Then as we entered the year 2022 the Availability of cash 💸 from the VCs to raise funding dried up due to many reasons . Will not get into the reasons of it in this post. Do let me know whether u want me to write another post over that topic 👇
As Availability of cash got reduced suddenly these startups just couldn’t raise funding rounds and as majority of them had their cash flows negative they just couldn’t sustain and due to that are conducting massive layoffs and some of them even died💀
Watch this video if Backstage with millionaires to understand the layoffs conducted by these startups and those startups who just died 👇
Another question u might have is what’s the reason behind layoffs? Theirs a term in startup which is called - Runway of startup . That means how much more months they can sustain without it raising money (They require money to sustain cause they are making losses)📉
If they cut down the costs of their employees salaries they can increase their runway of startup and sustain even further more 3 to 6 months until this bad period of startups is over and then again raise funding 💰
Now the way forward for these startups is growth + profitability. Earlier it was growth at any costs now its changed to growth + profitability. Startups will have to eventually shift focus from growth at any costs to growth + profitability.
That’s what’s happening in startup Ecosystem guys. Hope u understood it
Bye 👋