India’s startup story intact: HCL Tech’s C Vijayakumar
SOME REDUCTION IN VALUATION, BUT BARRING THAT, BIG PICTURE IS STILL VERY VIBRANT, SAID HCL TECH’S CHIEF EXECUTIVE
India’s startup story is “intact” and its tech innovation fundamentals remain vibrant and relevant in spite of fluctuating valuations in the startup space, according to HCL Technologies chief executive officer C Vijayakumar.
The comment by the Indian IT major HCL Technologies’ top honcho comes at a time when investments and venture capital deal volumes in the startup space have started to taper, as investors turn wary of committing large cheques amid uncertain market conditions.
Asked about the startup valuations coming-off their peak, and whether the space is headed for a possible reset, HCL Tech’s Vijayakumar in an interview to PTI said: “I absolutely believe that the India startup story, tech innovation, products, all of that coming out of India, is very intact”.
“Obviously there is some kind of reduction in valuations... but barring that, the big picture is very vibrant and relevant for a lot of new things that are happening in the market. So, I am very positive on that,” Vijayakumar added.
After a dream run and heady valuations in past years, the wave of venture capital chasing the Indian startup ecosystem (the third largest startup ecosystem in the world) appears to be dwindling somewhat.
Spooked by concerns over profitability, cash burn, and corporate governance issues, investors are raising their guard, while stock market corrections have taken the sheen off newly-listed startups.
Funding in startups dropped by 17% sequentially to $6 billion in the April- June period, according to industry body Nasscom.
As per a report by market intelligence platform Tracxn, the total funding raised by Indian startups in the justended June quarter fell 33% sequentially to $6.9 billion.
The funding seems to have come off the previous high, witnessed in Q3 2021, the Tracxn report said, while indicating a “major consensus amongst market players of a ‘winter of funding’ or a downturn in investors’ confidence and sentiments towards funding startups”.
On whether HCL Tech would look at the startup space for acquisition, given the valuations have turned attractive, Vijayakumar said, “it all depends... we’re constantly looking for capability-led acquisitions, in the services and products side. If we find something interesting, we may look at it.”
HCL Technologies recently reported a 2.4% year-on-year rise in its consolidated net profit for the three months ended in June 2022 at ₹3,283 crore.
The revenue of the company stood at ₹23,464 crore, nearly 17% higher than the year-ago period.