Funding challenges being faced by Indian startups is a “temporary phenomenon” and the sector is expected to turnaround in 1-2 years, IT industry veteran Kris Gopalakrishnan said on Wednesday.
“A significant number of new companies are in the early stage. Funding is lot more challenging. And, hence, the number of companies migrating to series A, B, C is slowing down. This is a temporary phenomenon, these are cycles. I expect that a year from now, may be two years from now, things will turnaround,” he was quoted by PTI as saying. “These are cycles. One, as things get heated up, they have to cool down. Second, global environment itself is challenging,” the Infosys co-founder added.
Gopalakrishnan is also a co-founder of venture capital firm Axilor Ventures.
“If one were to look at the positives, India is the only country where one can now get 7 to 8 per cent returns. So, more investments must come to India. If the dollar appreciates, again some money will go out. So, these are complicated macroeconomic issues, and since we are part of the global economic scenario, all these things will play out in India too,” he was quoted by PTI as saying.
“We (Indian startups) are going through a difficult period at this point in time. But that’s part of the cycle. I wouldn’t be alarmed. Right now it’s a difficult period. Startups are finding it challenging. On the positive side, a large number of new startups are coming up,” he told PTI.