Home >Companies >Start-ups >Start-ups in 2017: Adapting to the new normal

For Indian start-ups, 2016 was the year of retreat from the excesses of the year before. Yet, while start-up funding dropped by nearly half during the year, the number of deals were nearly the same as last year, highlighting that investor appetite remains strong. Next year is likely to be more of the same: focus on cutting losses, increase in valuation of selective high-performers and brutal competition among the top internet companies.


Rebound in consumer Internet market

The hopes of e-commerce companies rest on whether the country’s famously fickle and deal-hungry shoppers will increase spending and whether more of them will take to online retail after a bitterly disappointing 2016, when the e-commerce market didn’t grow from the previous year.

Market share battles

Battles between Flipkart and Amazon and Ola and Uber will help determine the future of India’s start-up and investor ecosystem.

Late-stage funding

After the sudden pullback by Tiger Global Management and SoftBank Corp., there’s a large gap in the late-stage investor space. Will the two come back in 2017 and if not, who will fill this void? 

Enterprise software start-ups—the new investor darlings

Investors who lost their shirts betting on capital-guzzling food and grocery delivery start-ups in 2015 switched en masse to capital-efficient enterprise software or software-as-a-service (SaaS) start-ups in 2016. It’s up to the SaaS start-ups to show they aren’t just another new false dawn.

The expansion of digital payment and financial technology start-ups 

Demonetisation has given an unexpected boost to digital payments, the cause of which was also furthered by the launch of the United Payment Interface (UPI). At what pace will the expansion of digital payments and Internet finance continue?


Kalyan Krishnamurthy, head, category design organization at Flipkart 

The Tiger Global representative who’s running the business or sales side of India’s largest e-commerce firm is considered to be the last hope of the company against Amazon India. Krishnamurthy’s efforts and Flipkart’s consequent performance will also help determine if Tiger Global returns to bet big time on Indian start-ups.

Vijay Shekhar Sharma. Photo: Pradeep Gaur/Mint
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Vijay Shekhar Sharma. Photo: Pradeep Gaur/Mint

Vijay Shekhar Sharma, CEO, Paytm 

The face of digital payments, Sharma is also fast becoming the country’s new entrepreneurial icon. He is leading the country’s digital payment charge and also attempting to change banking.

Bhavish Aggarwal. Photo: Hemant Mishra/Mint
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Bhavish Aggarwal. Photo: Hemant Mishra/Mint

Bhavish Aggarwal, CEO, Ola 

Among the start-up stars of 2015, Aggarwal is one of the few who has come out of 2016 with his reputation only slightly diminished. How long can he hold off Uber? That question remains unclear.

Masayoshi Son. Photo: Ramesh Pathania/Mint
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Masayoshi Son. Photo: Ramesh Pathania/Mint

Masayoshi Son, CEO, SoftBank 

After Nikesh Arora’s shock exit from SoftBank earlier this year, Son will decide SoftBank’s investment strategy. His decisions will have ripple effects on the entire start-up ecosystem in India.

Girish Mathrubootham. Photo: Nathan G./Mint
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Girish Mathrubootham. Photo: Nathan G./Mint

Girish Mathrubootham, CEO, Freshdesk 

What Flipkart is to consumer Internet start-ups, Freshdesk is to enterprise or software-as-a-service (SaaS) start-ups. Mathrubootham has driven the company’s fast expansion. Can Freshdesk keep delivering flying sales growth? 


Flipkart’s and Ola’s fund-raising efforts 

This will be a landmark event of 2017. Flipkart’s last reported valuation of $15 billion is considered too rich, which has been reinforced by the fact that five of its investors have cut their estimates of the company’s worth. The price at which Flipkart raises its next round will move the needle towards an easing of the funding slowdown or a tightening.

Though not quite as institutionally important as Flipkart, Ola is one of the few unicorns which has the heft to affect the future of the start-up ecosystem. Its fund-raising will help provide a clue as to whether investor sentiment towards Indian start-ups is improving or not.

Alibaba’s imminent entry 

China’s Alibaba Group has been weighing an entry into India’s e-commerce either through its own platform or through an acquisition. Will 2017 be the year it finally makes the move? 

Big Billion Days sale in October 2017 

Flipkart outsold Amazon India in 2016’s all-important BBD. The CEOs of the companies made snide remarks against each other. The control of the world’s last big Internet market is at stake. All eyes will be on who wins the 2017 round. 

Focus on exits 

Venture capitalists (VC) in India have struggled to get exits. Now the patience of their investors, called limited partners, is running thin. VCs will be pushing hard to get returns possibly through initial public offerings, the holy grail for Indian start-ups.

Post-demonetisation India

The government’s so-called demonetisation drive gave a massive boost to the adoption of digital payments. How many new users of digital payments will stick?

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