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Ronnie Screwvala: No funding winter for startups with real business models

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There is no funding winter for startups and unicorns with great and real business models and for those building organisations to outlast all others, according to Ronnie Screwvala, Co-Founder and Chairperson of higher education platform upGrad.

In an interaction with Screwvala said that even today, there are investments being closed daily across multiple sectors, as the world faces a great deal of uncertainty over multiple macro-economic factors.

Here are the excerpts from the interview:

Q: How do you look at the current wave of ‘funding winter’ in India?

A: I am always amused to hear this phrase ‘funding winter’, heard it so often in the last 15 years. I always thought only God was responsible for the multiple seasons we enjoy each year but of late, the private equity (PE) investor community is taking that place with their own patent on seasons.

Summer is when you bask in your own self-made glory, excesses and intoxication of hyper valuations, where no one is accountable and everyone is told to make hay while the sun shines.

Monsoon (unique to India) is a realisation that when ‘it rains it pours’ — good or bad.

Then, of course, is Winter, the time to re-write the same 50-page presentation that in summer months said exactly the opposite — the time to reverse the same intoxication of fund raise, valuations and hyper so-called growth with ‘one time’ write downs and blame the whole world, war, inflation and more, that was lurking around the whole summer but no one wanted to put their glasses on.

Seriously though, there is no funding winter for companies with great and real business models and for those building organisations to outlast all others. Even today there are investments being closed daily across multiple sectors — maybe not with the maverick investors who may be.

Let’s face it, the markets have corrected 10-12 per cent, that’s it. Overall, it is still way higher than pre-Covid and if you look, many companies are at their all-time high. This is also the best time for real businesses and mature founders not inflated with valuations to go out there.

Every company worth its value has to go through multiple seasons, over and over again, and the right ones grow and mature from that.

Also in Winter, the most elegant of snow leopards come out to hunt and be predators, and so Winter is the time for those who want to build to outlast and who want to be predators.

Q: The edtech sector is witnessing layoffs. Is this because funding dried up or there is more to it?

A: There is absolutely no ‘dry spell’. Just because a few handful of start-ups got crazily funded, made them lose all focus, pushed to grow and diversify are now being forced by those same investors to wake up and smell the coffee, does not mean there is any dry spell.

They were misguided by themselves and their Board and now are correcting themselves, unfortunately at the cost of valued working colleagues, but they are the exception, not the trend at all.

Never in a 100 years of education and ‘LifeLongLearning’ has there been a more opportune time to disrupt scale and include millions of college learners and working professionals to re-invent, re-skill and get onto a new growth path in their careers. India is also placed brilliantly to open up the higher education market in Asia and around the world.

We, at upGrad, have stayed away from the hubris of distraction and focused on outcomes and impacting careers.

Let there be no mistake, there is no better time than now. K12 went through its Covid bump and it is now seeing much needed correction, but the majority of companies in edtech are just getting started.

Q: How do you look at the global macroeconomic conditions that have engulfed economies the world over?

There were some interesting themes across the three days at the World Economic Forum (WEF) at Davos. Here are some takeaways:

A) Those who were questioning the end of globalisation had not really spent enough time defining what that meant in the first place, before sounding the death knell on it. Globalisation is here to stay as the world consumer wants it that way. An 18-year-old Zayda in Bangladesh wants to own an Apple iPhone and the 22-year-old Amari in Zambia wants to graduate from a UK university.

While the world leaders have in their own way created barriers, through war or threats of war and more insular growth, the seven billion+ people on this planet will not let that happen and globalisation will prevail.

B) There is a reskilling revolution that is happening and will be a tsunami over the next decade across the world. Better education and lifelong learning — accessible and affordable to all — digitally can and will add a massive $8 trillion to the global GDP in this decade. Power shifts in countries will take place based on the workforce and their population being ready for the jobs of tomorrow and also be the learning capitals of the world.

C) India also has the place and the position to be the new voice of global leadership — largest democracy, fastest growing economy and a world leader with clarity, conviction and an agenda to put it at the centre-stage in the world.

D) There is no doubt that the world is going to pass through a very, very challenging time. With food being disproportionately available to countries around the world, the poor will get poorer even if the rich do not get richer. Covid is not leaving the planet in a hurry but has got us all hyper alert on health enough to take notice of even Monkeypox – something that was prevalent in Africa for years but ever since it hit the “western” world.

And the war is not going away in a hurry and it will be interesting to see how engaged the West stays as the war prolongs or will they lose interest if it does not serve their agendas.

The big question we also need to track is how polarised the world will get in the next two-three years. All of this will call for incredible world leaders and leadership in politics and in building business and organisations.

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IMF, World Bank see India’s potential as engine of global trade: FM Sitharaman

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San Francisco, April 21: Finance Minister Niramala Sitharaman said on Monday that India has become the fastest-growing economy, driven by the “visionary leadership” of Prime Minister Narendra Modi and the stability provided by a continuing government.

Addressing the Indian diaspora in the US, the Finance Minister said, “When we say that India is the fastest-growing economy and when the IMF and World Bank recognise that India can be the engine driving global trade, what they are recognising is the immense potential that exists in India.”

Highlighting the steps to strengthen the Indian economy, Sitharaman said, “During the Covid-19 pandemic, our fiscal deficit went up. But in 2021, we came up with a clear signal as to how we wanted to manage our fiscal deficit. We set year-on-year targets and committed to bringing the fiscal deficit below 4.5 per cent by 2026. And that’s what we have been following each year without fail.”

She said the government’s primary focus under Prime Minister Narendra Modi is achieving ‘Viksit Bharat’ by 2047. This vision encompasses improvements across sectors impacting women, the impoverished, youth, and farmers.

FM Sitharaman highlighted that India prioritises ‘Sunrise Sectors’ and stands out as a leader in Digital Public Infrastructure, driving innovation and growth..

She also said, “Prime Minister Narendra Modi makes it a part of his every overseas visit to connect with the Indian diaspora because he thinks that it is important that India connects with each one of you who, located in whichever part of the world, are doing your best to contribute to the world and stand out as an example.”

Sitharaman is on a five-day visit to the United States. Upon her arrival in San Francisco, she was received by Indian Ambassador Vinay Mohan Kwatra

During the visit, she is slated to deliver a keynote speech at Stanford University and hold discussions with CEOs in San Francisco on investment and technological advancements. The visit will also include participation in diaspora events, enhancing India’s global cultural presence.

In Washington DC, Sitharaman will attend the IMF and World Bank Spring Meetings, and the G20 Finance Ministers and Central Bank Governors meetings. She will also hold bilateral talks on the sidelines with counterparts from the US, the UK, France, Germany, Saudi Arabia, and other countries, as well as top officials from international financial institutions. After completing her US trip, Sitharaman will travel to Peru for a visit from April 26 to 30.

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FM Sitharaman to showcase India’s economic dynamism during US, Peru visit

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New Delhi, April 19: Union Finance Minister Nirmala Sitharaman is set to embark on an official visit to the US and Peru, beginning April 20, where she is slated to participate in multilateral dialogues to showcase India’s economic dynamism, as the country prepares a bilateral trade agreement (BTA) with the US, it was announced on Saturday.

During her visit to the US, the Finance Minister will visit San Francisco and Washington, DC, from April 20-25, according to a Ministry of Finance statement.

In San Francisco, FM Sitharaman would deliver a keynote address at the Hoover Institution at Stanford University, titled ‘Laying the foundations of Viksit Bharat 2047,’ followed by a fireside chat session.

The Finance Minister will also interact with top CEOs from prominent fund management firms during a roundtable meeting with investors, besides holding bilateral meetings with CEOs from top information technology (IT) firms based in San Francisco.

She will also participate in an event featuring the Indian diaspora in San Francisco and interact with the Indian community settled there, said the ministry.

In Washington, DC, FM Sitharaman will participate in the Spring Meetings of the International Monetary Fund (IMF) and the World Bank, the 2nd G20 Finance Ministers and Central Bank Governors (FMCBG) Meetings, the Development Committee Plenary, IMFC Plenary, and Global Sovereign Debt Roundtable (GSDR) meeting.

On the sidelines of the Spring Meetings, she will hold bilateral meetings with her counterparts from several countries, including Argentina, Bahrain, Germany, France, Luxembourg, Saudi Arabia, United Kingdom, and the US; besides meeting EU Commissioner for Financial Services; President, Asian Development Bank (ADB); President, Asian Infrastructure Investment Bank (AIIB); United Nations Secretary-General’s Special Advocate for Financial Health (UNSGSA); and First Deputy Managing Director of the International Monetary Fund (IMF).

During her maiden visit to Peru from April 26-30, the Finance Minister will lead an Indian delegation of officials from the Ministry of Finance and business leaders, highlighting the strengthening bilateral economic and trade relations between the two nations.

Beginning her visit in Lima, she is expected to call on the President of Peru, Dina Boluarte, and Prime Minister Gustavo Adrianzen, besides holding bilateral meetings with the Peruvian Ministers of Finance and Economy, Defence, Energy and Mines, and also holding interaction with local public representatives.

The Finance Minister will chair the India-Peru Business Forum meeting with prominent business representatives in attendance from both India and Peru.

FM Sitharaman will also hold an interaction with the Indian investors and businesses currently operating in Peru, as well as the Indian business delegation visiting Peru. The Finance Minister will also participate in a community event in Lima, where she will interact with the Indian diaspora living in Peru, according to the ministry statement.

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Foreign investors infuse Rs 8,500 crore into Indian equities this week

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Mumbai, April 19: Foreign investors have once again turned their attention to Indian equities, pumping in around Rs 8,500 crore during the week, as per the latest National Securities Depository Limited (NSDL) data.

The inflows came in during just three trading sessions — Tuesday, Wednesday, and Thursday — as stock markets remained closed on Monday and Friday due to public holidays.

This marks a positive turnaround after months of consistent selling by foreign institutional investors (FIIs) in the equity segment. Their return helped the markets end the week on a strong note.

Both the Indian equity indices wrapped up the week on a strong recovery by surging over 4.5 per cent — driven by positive signals from both domestic and global factors.

The rally was primarily fuelled by optimism surrounding the deferral of tariffs and recent exemptions on select products, raising hopes for potential negotiations that could mitigate the impact on global trade.

A key reason behind this fresh wave of investment is the weakening of the US dollar. As the dollar slips and currencies like the Indian rupee gain strength, global investors find it more attractive to move funds from the US to emerging markets like India.

While these inflows bring temporary relief to the markets, analysts say the coming weeks will be crucial.

“Investors will be watching closely to see whether this positive trend continues or if global factors once again influence foreign investment in Indian stocks,” experts noted.

As per market experts, in the coming week, market participants will closely watch the quarterly earnings of major companies like Infosys, HDFC Bank, and ICICI Bank.

Other key players, including HCL Technologies, Axis Bank, Hindustan Unilever and Maruti Suzuki India are also set to release their financial results.

Meanwhile, the expiry of the April derivatives series could add to market volatility. On the global front, any developments related to tariffs and their potential impact on international markets will also be closely tracked, the experts mentioned.

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