ET Now Exclusive: From funding availability and profitable scale to the rise of AI and deep tech startups, Sanjeev Bikhchandani, Founder & Executive Vice Chairman of Info Edge India, explains what could define India’s startup ecosystem in the years ahead.
The startup ecosystem has matured significantly over the last 17 years since we started investing, and over the 36 years that I have been an entrepreneur. Markets are much larger today, many more entrepreneurs are building businesses, funding is available, and IPOs have become a viable exit route.
On the revival of the IPO market, Sanjeev Bikhchandani said, “I think it may take a few months, but the IPO market will return. A key factor is the return of foreign institutional investor (FII) capital to India. If we can attract those flows again, markets will recover, and IPO activity will pick up. FIIs have multiple investment options, including markets such as Korea, Taiwan and Japan. India does not currently have a major foundational AI or semiconductor play, and some of those markets have delivered stronger returns over the past year. However, if enthusiasm around AI investments overseas moderates, we could see capital flow back into India, which would be beneficial for our markets.”
“There is a great deal of promising activity in AI and deep-tech startups. However, most of these companies are still at an early stage and relatively small. It will take time for larger companies to emerge. While there is substantial innovation happening in AI applications, there are comparatively fewer companies working on foundational AI technologies. Building those capabilities will take several years.”
On valuing AI startups, Sanjeev Bikhchandani said, We evaluate AI startups much like any other startup. At the earliest stages, companies are valued based on their promise rather than cash flows, because there are no meaningful cash flows yet. Traditional valuation methods, such as discounted cash flow (DCF) analysis, are often not applicable.
Instead, we assess the founding team, the quality of the idea, and the size of the opportunity. If those factors are compelling, we invest.
