Owing to funding crunch, many startups are going to get swallowed by big fishes this year
Advertisement
The mergers and acquisitions in startups are going to shoot up in this financial year owing to funding crunch.
Many startups, especially tech-based firms, are going to merge with the sharks in the industry and the number is going to break all past records.
As per data tracker Venture Intelligence, the mergers and acquisitions intech startups more than doubled to 146 transactions in the fiscal year ended March 31from 69 in 2014-15.
Themerger and acquisitions are also going to rise as Indian startup giants such Flipkart and Snapdeal are seeking to make strategic purchases.
"We definitely expect to see more consolidation this year driven by a few factors-acquisitions that are complementary and synergistic; consolidation to take out competition; consolidation of cap tables; and acqui-hires," Aashish Bhinde, head of digital and technology at Avendus Capital, told ET.
The primary reason behind this is funding crunch. Many startups that started on vision are now aiming to be profit making firms.
“Overall, in terms of funding, it's going to get worse. Ventures that have raised series-A (funding) rounds are finding it difficult to raise follow-on rounds... There will be stress in terms of companies not having cash flows to sustain themselves,” Siddharth Parekh, senior partner at private equity firm Paragon Partners told ET.
(Image: Thinkstock)
Advertisement
Many startups, especially tech-based firms, are going to merge with the sharks in the industry and the number is going to break all past records.
As per data tracker Venture Intelligence, the mergers and acquisitions in
The
"We definitely expect to see more consolidation this year driven by a few factors-acquisitions that are complementary and synergistic; consolidation to take out competition; consolidation of cap tables; and acqui-hires," Aashish Bhinde, head of digital and technology at Avendus Capital, told ET.
The primary reason behind this is funding crunch. Many startups that started on vision are now aiming to be profit making firms.
Advertisement
(Image: Thinkstock)
Advertisement
- Tesla tells some laid-off employees their separation agreements are canceled and new ones are on the way
- Taylor Swift's 'The Tortured Poets Department' is the messiest, horniest, and funniest album she's ever made
- One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
- The Future of Gaming Technology
- Stock markets stage strong rebound after 4 days of slump; Sensex rallies 599 pts
- Sustainable Transportation Alternatives
- 10 Foods you should avoid eating when in stress
- 8 Lesser-known places to visit near Nainital