National Bank for Infrastructure Development Chairman and veteran banker KV Kamath suggested startups think of their runway as 25 years – during which time India will grow into a $25 trillion economy – and everything will fall into place. “Keep that in mind: $25 trillion in 25 years, everything will fall in place. We are at $3.5 trillion now. Do the compounding and you’ll see we will be at $25 trillion.”
Other nuggets from his Fireside Chat on ‘Transitions and Value Creation’ organised by VC firm IvyCap Ventures’ IvyCap Day 2022 in Mumbai include:
On the dichotomy of startup value vs valuation:
Startups chasing valuations without becoming cash-flow positive, or at least having it in their line of sight, are bound to hurt themselves. “Startups should focus on becoming either cash-flow positive, or have it in their line of sight, then you take to the public market.” Otherwise, it’s a risk not just for the startup, but it could also create an environment of distrust, he added.
On increasing the number of women in startups:
“Women from any background (and not just STEM) could be a talent for founding or working in startups. That barrier of not having a pool is no longer there. We need to put away biases at…the recruitment stage that only men can do certain jobs, and in promotions and opportunities. You neutralise that, the pool will grow on merit.”
On India’s fintech and infra opportunities:
“In China, every single bridge, every single tunnel, the amount of modern technology that has gone in, which didn’t exist say 5-10 years before, in terms of sensors and things like that is amazing. There is a whole lot of opportunity in businesses also using technology.”
The fintech space will see the most disruption happen, he said. “Value creation in your platform you have done. If you are impatient to create valuation, you will hurt yourself.” He suggested being patient and pro-actively looking for partners in incumbent players to tide over regulatory challenges.
On Indian startups’ role on the global stage:
“Almost everything we do, and the costs at which we do it at, it is a scalable and replicable model in any third world country.” He gave the example of UPI and the low-cost ecosystem around it, asking which other country has a comparable platform which can absorb the online payments of 1.3 billion people. “The challenge is if there is a burn, are they able to take the burn and how long can they take it. That’s why I’m saying if you can be cash-flow positive here, then you come to a different equation globally.”
Besides, he pointed out, it becomes even more important to have your own platform when the events of today have created blocs and there is a threat of sanctions. “Why cannot it be extended to other countries. And you have like-minded partners in the BRICS nations.”