Within two years down the line, India will see many tech startups getting in to public companies. The intention of Indian startups to go public has more to do with their investors seeking exits reveals the industry experts.
The prime reason of this step forward is experiencing disappointing debuts on stock exchanges and secondarily because of WeWork’s decision to withdraw its IPO. World’s top tech startups including ride-hailing companies like Uber and Lyft are among the few names that are a victim of the share market. According to four people aware of the development at least half-a-dozen tech startups including unicorns such as Freshworks, Ola and Oyo are looking at going public in the next couple of years.
The failure of WeWork IPO and the underwhelming investor response to Uber and Lyft’s share sales are raising alarms in the minds of the investors which in turn is creating doubts among the investors about the lofty valuations assigned to these startups.
According to Niren Shah, managing director at Norwest Venture Partners, India – “It has been observed that globally capital is slowly starting to dry up. With this massive change the entrepreneurs will soon start realizing that it is important to opt for an IPO even as a source of funding. Also venture capitalists are seeking exits which as a practice don’t happen to come that easily by way of a merger and acquisition. This is precisely why IPOs would then become a way for investors to exit. As and when the unit economics would improvise and Indian startups starts becoming profitable majority of them would opt to turn to public markets for funding.”