According to a recent research note by JM Financial, several unicorns and soonicorns backed by Sequoia are preparing to go public as soon as the market sentiment turns positive. These companies, including CRED, Dailyhunt, Meesho, and Gupshup, are seeking to engage with public market participants to generate constructive feedback and keep a close eye on listed companies with similar business models.The current funding winter has driven these startups to focus on capital efficiency, with a heightened emphasis on profitability potential and timeline. Companies have paused or terminated initiatives with uncertain returns on investment and are upfront about their profitability plans.However, the tech industry in India and other geographies has faced significant challenges, including macroeconomic uncertainties, the Russia-Ukraine war, and a funding winter that have led to a lowered inflow of capital. As a result, most unicorns and soonicorns are aggressively focusing on achieving profitability, which has come at the cost of layoffs.
According to layoff tracker, Indian tech startups have laid off over 23K employees since 2022. According to JM Financial’s observation, while these startups are targeting a large and expansive Total Addressable Market (TAM), they are also heavily focused on the right customer segments. For example, Meesho is looking to better serve the value-conscious Tier 2 and beyond shoppers, while Dailyhunt is aiming to create engaging content for the working class of India. Meanwhile, CRED is targeting financial services for the top 1% of India.