STARTUPS & THE FUTURE OF TECHNOLOGY INVESTMENTS

The Indian technology ecosystem has been on an impressive trajectory, marked by several successful IPOs.

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"Show me the incentive, and I will show you the outcome."- Charlie Munger

This momentum is likely to continue as the ecosystem shifts from a topline growth focus to prioritising sustainable, bottom-line-driven strategies. Remarkably, in just two years, companies have successfully pivoted from a "growth at all costs" mentality to one of responsible, sustainable expansion. This shift underscores the incredible execution capabilities of these companies and solidifies the belief that technology startups attract the best talent in corporate India. How else could they have transitioned so swiftly from a "grow at all costs" culture to one of responsible, sustainable growth? The missing piece wasn't the market or the business model-it was the right incentive, as Munger so aptly points out.

The outcome is now evident for all to see. It's clear that the previous incentive of valuation-led growth has ceded ground to bottom-line growth as the real driver of value creation. India has seen around 250 IPOs in the last five years, with roughly 10 per cent of these being backed by venture capital-a reasonable proxy for technology companies. However, when we examine the last 12 months, the ratio of startup IPOs to all IPOs has risen to around 20 per cent.