Milan Ganatra on Investment in the Indian Startup Ecosystem in 2022

Indian Startup Ecosystem is growing hugely with 60,000 startups creating opportunities of employment as well as investment opportunities for investors. StartupTalky got an opportunity to get an opinion of Milan Ganatra, founder of 1SilverBullet as an investor.

1SilverBullet is a fully digitalized, cutting-edge investment and insurance B2B gateway that serves three financial services verticals: investments, insurance, and lending. Leveraging the power of technology such as Blockchain, the platform acts as a single point of contact for investors and financial institutions, linking them in one place via a secure API.

Here is excerpt of the interview with Mr. Milan Ganatra, Founder & CEO of 1SilverBullet about Indian startup ecosystem.

How was the year 2021 for you as an investor?

As an investor, 2021 was highly promising, with massive investment opportunities in IT and technology-driven businesses, as a result of the COVID-19 pandemic. With new models developing in the market, firms and young entrepreneurs can address problems in a timely and cost-effective manner.

What is a warning sign for you when investing in a startup?

Startups are young businesses, and it is critical that the vision be clear from the beginning, as this is the foundation of a successful enterprise. One of the red flags I would look for is a loss of vision—key employees or workers who have lost confidence in the company's vision. The second sign would be a lack of messaging - nothing, or very little to talk about new product segments/ services, which leads to lower consumer satisfaction.

We are seeing many startups exiting with IPO, what’s your opinion on that? How is it going to change the ecosystem?

The IPO market had an outstanding year in the face of uncertainty, with government stimulus programs/regulations playing a big part in its amplification. Regulators and IPOs have played a critical role in attracting private investors and piqueing the attention of retail investors in the funding ecosystem. Previously, IPOs were only possible for companies that had made a profit in the previous three years, but when the regulations were altered to allow even loss-making companies to participate in the IPO pool, it completely changed the game for startups. So, where there were previously no exit options for some of the larger investors, this new move has fueled greater investment because a timely exit is now possible.

High valuations and market liquidity will keep the IPO window open in 2022. Internet-based startups who have served their shareholder base well over the years, have shown growth in scale, and rewarded their investors, will continue to do well as a result of robust market demand.

More than 42 unicorns in 2021. What do you think caused this wave? Is the valuation justified according to you?

Unicorns are defined as disruptive, technology-driven, and innovative firms with the potential to be listed among the next Fortune 500 companies. In this tech-focused era, new-age company models are upending traditional ways of doing business, leveraging digital modes. So far, their valuation has been reasonably justified, and given the amount of areas they have covered thus far, most of them would expect to rise rapidly.

The investor community has played a vital part in supporting compatible growth in the startup ecosystem and the company's success in a relatively short period of time. New age entrepreneurs are planning for the future and embracing the post-pandemic digital wave. It is reasonable to expect a systemic shift in entrepreneur and consumer behaviour as a result of the rapid thinking that these unicorns have embraced.

How can we support/ enable entrepreneurs in tier 2 and tier 3 cities?

Entrepreneurs in tier 2 and 3 cities are now at par with tier 1 cities and good talent is not willing to migrate as everything is transparent, approachable and available at fingertips. Be it engaging with the target audience, running business operations, or connecting with potential investors/customers. As digital communication channels have grown in popularity over the previous two years, entrepreneurs from tier 2 and tier 3 cities have a far higher acceptance rate.

What do you look forward to as an investor in the year 2022?

For the year 2022, I hope to see a 50 percent increase in the ecosystem with 60+ unicorns. More worldwide inventions and solutions are projected as a result of the rise of new-age entrepreneurs and the emergence of unicorns. Investors are seeking business concepts that can demonstrate both long-term promise and dependable business procedures.

What are a few sectors you think would be hot in the upcoming year?

India presently has the world's third-largest startup ecosystem. We should expect a lot of M&As in the fintech area this year alone, with major players performing fantastic work and complementing larger companies on multiple fronts. Fintech companies that have already covered the market are expected to develop further. They have the capacity to overcome obstacles and become tomorrow's unicorns.