The funding winter for the startup ecosystem might proceed for one more 12 to 18 months and the business might need to grapple with a “lot of turmoil and volatility,” e-commerce big Flipkart chief government Kalyan Krishnamurthy has warned executives.

“That is going to be robust subsequent yr. My estimate is that a number of startup founders will hit the market between April to June subsequent yr, and that’s the second of fact for the ecosystem,” he stated at a gathering over the weekend organized by Indian newspaper Financial Occasions.

Usually a reserved and soft-spoken government, Krishnamurthy informed a whole bunch of attendees that startup founders ought to embrace a down-round and restructure their companies. Many startup founders aren’t wiling to take a haircut on their earlier valuations in new funding deliberations, buyers say.

Some startup founders consider that they won’t be able to draw and retain the expertise if a funding occasion all of a sudden makes the staff’ current shares much less precious.

“In 2001, firms noticed a 2x to 6x spike in valuation with some underlying progress and profitability assumptions for the subsequent two to a few years. I believe it shortly grew to become clear that these assumptions aren’t going to play out,” stated Krishnamurthy, describing the increase to startup funding in India final yr.

Indian startups raised a document $39 billion in 2021 as buyers aggressively seemed to double down in rising markets. In distinction, because the market reserved its place earlier this yr, funding within the quarter that led to September slid under $3 billion.

And which means an introspection on what must be achieved to outlive, he stated.

Krishnamurthy, who beforehand labored on the funding store Tiger International, famously helped architect Flipkart minimize its workforce by 30% 5 years in the past to assist the agency develop into extra environment friendly. “We grew from there, so it’s not an issue,” he stated.

Walmart-owned Flipkart, final valued at $37.6 billion, put a hiring freeze earlier this yr and halted its acquisition spree, which earlier noticed it spend about half a billion {dollars} to increase into on-line healthcare and journey classes. The agency — which counts SoftBank, Tiger International, GIC, Canada Pension Plan Funding Board, Qatar Funding Authority, Tencent and Franklin Templeton amongst its backers — doesn’t plan to go public for at the least a yr.

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