Startup valuations return to 2020-21 levels

With investments in over 130 companies, which include big successes like Zomato and Policy Bazaar, Info Edge founder Sanjeev Bikhchandani (pictured) and his partners in the venture business Kitty Agarwal and Chinmaya Sharma, unveil their future plans in an interview with Surajeet Das Gupta in Gurugram. Edited excerpts:

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Is the squeeze in funds by investors during the pandemic now changing?

Sanjeev: In 2022, the average cheque size offered in our second fund was roughly 20 per cent lower than that in 2019-21 but with a 20 per cent higher shareholding in companies. But in 2024 and 2025, early-stage valuations are back to 2020-21 levels. So, pre-money valuation for startups in the pre-launch stage, which were at $5-7 million, are now back at $10-12 million. Average size of the cheque for pre-launch investment, which was at $1-1.5 million, is now back at $1.5-2 million.

So, is the market again getting its frenzy on valuations?

Kitty: Many venture capital (VC) funds have fresh pools of capital and dry powder, and the best companies and the best founders have again started getting multiple term sheets for investment. Our average term sheet closure is now around three-to-four weeks, some of them are in a week. In 2022-23, we were taking one-to-two months to do so.

Is it a good time or a not-so-good time for VC funds?