How Covid-19, Increased Internet Usage Pushed More Startups to Go Public in India

Khevna.P.Shah, INN/Bangalore

@Shahkhevna1, @Infodeaofficial

Over the last 10 years, web usage in India has grown at a compound annual rate of growth (CAGR) of 30 percent, leading to 13 times growth of the world and preparing notable startups in the areas of e-tailing, online grocery, and others to launch their IPOs in the near future, a new report showed on Monday. The rapid climb within the consumer internet market has led to higher foreign investments, increased employment opportunities, and improved standards of living for people.

Despite a raging pandemic, the Indian startup ecosystem has attracted a rush of capital because the Indian startup ecosystem was ready to demonstrate its resilience and has actually been able to leverage the wave of digitization that covid-19 has resulted in.

“The e-tailing, online grocery, foodtech, ed-tech, and e-health sectors are expected to witness a particular increase in consumer spending this year. With Covid-19 expediting digital trends, the adoption of these online services has grown significantly, and platforms have seen a huge spike in their user-base,” said Mrigank Gutgutia, consumer internet expert at market research firm RedSeer.

As online platforms see more adoption and an increase in new users, they are clocking better unit economics. “This is adding on to their stability and making them set for IPOs. A number of notable start-ups are getting to go public within the near future,” Gutgutia added.

As new consumer habits are shaped by Covid, the user base of the Indian consumer internet sector has grown rapidly. Furthermore, as consumers get familiar with the greater convenience offered by online platforms, they’re also increasing their wallet share.

This, in turn, has accelerated growth for the buyer internet sector which is now expected to grow 4 times over subsequent 4-5 years, the report mentioned. As the e-commerce battle intensifies in India, with Reliance Retail’s JioMart being the newest major entrant with a huge potential to disrupt the space, the market size is estimated to grow eight times within the next five years the country.

As new consumer habits are shaped by Covid, the user base of the Indian consumer internet sector has grown rapidly.

Furthermore, as consumers get familiar with the greater convenience offered by online platforms, they’re also increasing their wallet share.

This, in turn, has accelerated growth for the buyer internet sector which is now expected to grow 4 times over subsequent 4-5 years, the report mentioned.

According to Sujeet Kumar, co-founder of Udaan, eye-popping valuations aren’t the foremost definitive benchmark of success for a startup and actually, can accompany tons of threats.

“Valuation is definitely not success. Valuation also comes with tons of threats. Because tomorrow if that number doesn’t grow as fast because it was once you become a unicorn then internally the workers can get demotivated. True valuation is how big your opportunity is and the way much money you would like to create those capabilities,” he said.

As companies from Reliance to BigBasket put their top dollar in serving daily grocery at your doorsteps, online grocery goes to be a subsequent battleground for growth, expanding to over $18 billion by 2024.

The e-Grocery market has grown 60 percent from the civil year 2020 and is predicted to grow 41-49 percent by the primary half CY21, consistent with RedSeer. As per the estimates, quite 50 percent of the $570 billion grocery retail space in India is addressable by e-Grocery platforms.