'Current turbulence opens up many other windows'

According to Vani Kola, this is the time when black swan companies emerge that solve pressing problems and pioneer new business models

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While the present environment of funding slowdown is real, Kalaari's Vani Kola feels it's not the same for all startups. "For startups that are burning cash, don't have proven unit economics, and profitability is far in the horizon, funding will be difficult. On the other hand, the current turbulence opens up many other windows including the opportunity to do deeper problem solving, to focus on product-market fit, to hire talent and toperate with greater discipline," says Vani Kola, Managing Director, Kalaari Capital.

Company handout

The recent carnage has hit growth and late-stage startups, who have to take haircuts on valuations, compared with last year. "At Kalaari, we're ready to back founders with disruptive ideas that have core IP or unique value proposition," says Kola.

An early-stage fund, Kalaari doesn't see any reason to revise its valuations and instead is ready to provide its companies all the support they can get. "At Kalaari, we have a founder-first philosophy. We not only want our founders to retain their ownership, but also seek to enable them to build impactful solutions," says Vani.

This is the time, Kola believes black swan companiesemerge that solve pressing problems and pioneer new business models. "We believe the current slowdown will create unique opportunities to invest into innovative startups that will shape India's digital future," adds Vani.

Kalaari has plans to actively invest into early-stage businesses. The number of deals is expected to be lower this year and bridge rounds will help some growth-stage startups weather the current slowdown. "If our portfolio companies need our support, we will double down and back them. We are deeply committed to backing our founders and enabling them to succeed," adds Kola.

Kola's advice to its founders during this time is to take a cold, hard assessment of their business. "They will need a clear picture of their burn and runway. It will be important to conserve their cash and operate with discipline in the current environment. When an economy is growing you get rewarded for growth, but when retrenching, conserving cash becomes important. It is not that different from how we manage our personal financial choices," says Kola.

In the coming year, Kalaari is planning to actively invest into emerging economies, which will contribute significantly to India's emergence as a $1T digital economy by 2030. "We believe sectors such as Gaming, D2C, Creator Economy and Deeptech, represent massive whitespaces and will yield many successful startups in the years to come," says Kola.

Factsheet

Companies: 90+

Unicorns: Dream11, Curefit, ElasticRun, The Good Glamm Group

Sectors: Gaming, SaaS, Edtech, Ecommerce / D2c brands, Logistics, Deeptech