Ronnie Screwvala: Winter without funding for startups with real business models

New Delhi: There is no funding winter for startups and unicorns with big, real business models and for those building organizations to outlast everyone else, according to Ronnie Screwvala, co-founder and president of higher education platform upGrad.

In an interaction with IANS, Screwvala said that even today, investments in multiple sectors are being closed on a daily basis, as the world faces great uncertainty about multiple macroeconomic factors.

Here are excerpts from the interview:

Q: How do you see the current wave of ‘funding winter’ in India?

A: It always amuses me to hear this phrase ‘funding winter’, I’ve heard it so often over the last 15 years. I always thought that only God was responsible for the multiple seasons we enjoy each year, but lately, the private equity (PE) investor community is taking that place with their own patent on the seasons.

Summer is when you bask in your own self-made glory, the excesses and intoxication of overvaluation, where no one is responsible and everyone is told to make hay while the sun shines.

The monsoon (unique to India) is realizing that when it ‘pours rain’, good or bad.

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Then, of course, comes winter, time to rewrite the same 50-page presentation that in the summer months said the exact opposite: time to reverse the same fundraising, valuation, and so-called hypergrowth intoxication with ‘one time’ writes and blames the whole world, war, inflation and more, that was lurking all summer but nobody wanted to put on the glasses.

Seriously speaking, there is no funding winter for companies with big, real business models and for those that build organizations that outlast all others. Even today, investments are closed on a daily basis in multiple sectors, perhaps not with the maverick investors that they can be.

Let’s face it, the markets have corrected 10-12 percent, that’s all. Overall, it’s still much higher than it was before Covid, and if you look, a lot of companies are at an all-time high. This is also the best time for real companies and mature founders who are not inflated with valuations to exit.

Every company worth its worth has to go through multiple seasons, over and over again, and the right ones grow and mature from that.

Also in winter, the most elegant snow leopards come out to hunt and be predators, so winter is the time for those who want to build to survive and who want to be predators.

Q: The edtech sector is seeing layoffs. Is this because the funds ran out or is there something else?

A: There is absolutely no ‘dry period’. Just because a handful of startups were insanely funded, made to lose all focus, pushed to grow and diversify, and are now being forced by those same investors to wake up and smell the coffee, doesn’t mean there’s a dry spell. .

They got themselves and their Board wrong and are now correcting themselves, unfortunately at the expense of valued co-workers, but they are the exception, not the trend at all.

Never in 100 years of education and ‘LifeLongLearning’ has there been a more opportune time to disrupt scale and include millions of college students and working professionals to reinvent, retrain and embark on a new path of growth in their careers. India is also in a brilliant position to open up the higher education market in Asia and around the world.

We at upGrad have stayed away from the arrogance of distraction and focused on impactful races and results.

Make no mistake, there is no better time than now. K12 went through its Covid hit and is now seeing a much-needed correction, but most companies in edtech are just getting started.

Q: How do you see the global macroeconomic conditions that have affected economies around the world?

There were some interesting topics during the three days at the World Economic Forum (WEF) in Davos. Here are some conclusions:

A) Those who questioned the end of globalization had not really spent enough time defining what that meant in the first place, before pronouncing the death sentence. Globalization is here to stay since the world consumer wants it that way. Zayda, 18, from Bangladesh wants to own an Apple iPhone and Amari, 22, from Zambia, wants to graduate from a UK university.

While world leaders have created barriers in their own way, through war or threats of war and more insular growth, the more than seven billion people on this planet will not allow that to happen and globalization will prevail.

B) There is a retraining revolution going on and it will be a tsunami for the next decade all over the world. Better education and lifelong learning, accessible and affordable for all, digitally can and will add $8 trillion to global GDP this decade. Power shifts in countries will take place based on the workforce and its population being ready for the jobs of tomorrow and also to be the learning capitals of the world.

C) India also has the place and position to be the new voice of global leadership: the largest democracy, the fastest growing economy and a world leader with clarity, conviction and an agenda to put it center stage in the world.

D) There is no doubt that the world is going to go through a very, very challenging time. Since food is disproportionately available to countries around the world, the poor will get poorer even if the rich do not get richer. Covid is not leaving the planet in a hurry, but he has us all hyper-alert about health enough to notice even Monkeypox, something that was prevalent in Africa for years, but since hitting the “western” world.

And the war is not going to go away quickly and it will be interesting to see how engaged the West stays as the war drags on or they will lose interest if it doesn’t serve their agendas.

The big question that we also need to track is how polarized the world will become in the next two or three years. All of this will require incredible world leaders and leadership in politics and in the creation of companies and organizations.

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