Nearly 46% of the startup founders who participated in VC firm Elevation Capital’s survey said that fewer people left the company in the last one year, and that retention has improved.Further, 50% noted that hiring for tech roles has become easier than last year as tech salaries have cooled down.
Even as the funding winter persists, founders are confident of a ‘warmer funding season’ come 2024 as half of those surveyed said it will get easier over the next 12 months. However, founders sound a note of caution and more than half the respondents (55%) said that it would be prudent to maintain a runway of at least 18 months. In reality, however, one in three founders (33.5%) currently operate with a runway of less than 12 months.
“Revenue growth is a key priority for founders, and rightfully so. Founders are now focusing inwards, and we advise them to continuously assess product-market fit, cut unnecessary burn, maintain marketing budgets, manage customer acquisition costs, and focus on internal resource optimisation. This aligns with our belief that making these changes will help founders prioritise the right resources to drive sustainable growth and expand market reach across India and globally,” Mridul Arora, partner at Elevation Capital, said.
When surveyed about founders’ concerns, a large majority (65%) highlighted revenue growth as a key focus. 58% also aspire to be profitable in the near-to-medium term while 18% said they have already reached this milestone. Entrepreneurs are also cutting out the flashy excesses to get to this goal. Of those who brought down their burn rate in the last year, 38% identified marketing as the area where spending was most curtailed.
“The trend signals a collective move towards greater financial sustainability and improved economics within the Indian startup ecosystem. We see numerous large startups and venture-backed unicorns clearly targeting profitability,” the report said.
