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

New Delhi: There is not financing winter for startups and unicorns with grandiose and real business models and for those who create organizations to outlive everyone else, according to Ronnie Screwvalaco-founder and president of the higher education platform update.

In an interaction with IANS, Screwvala said that there are still investments closed daily in multiple sectors today, as the world faces great uncertainty about multiple macroeconomic factors.

Here are the excerpts from the interview:

Q: How do you view the current wave of “winter financing” in India

A: I always enjoy hearing this phrase “finance the winter”, I’ve heard it so often over the past 15 years. I’ve always thought that God alone was responsible for the multiple seasons we enjoy each year, but in recent times, the private equity (PE) the investment community is taking that place with their own season patent.

Summer is when you bask in your self-made glory, excesses and the intoxication of overvaluation, where no one is responsible and everyone is told to make hay while the sun is shining.

The monsoon (unique in India) is the awareness that when “it rains it rains” – good or bad.

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Then, of course, there is the winter, the time to rewrite the same 50-page presentation that said exactly the opposite in the summer months: the time to reverse the same intoxication of fundraising, valuations and hyper so-called growth with “once upon a time. ‘notes and blames the whole world, war, inflation and more, which was lurking all summer but no one wanted to put on glasses.

Seriously though, there is no winter funding for companies with big, real business models and for those that build organizations to outlive all others. Even today there are investments that are closed daily in multiple sectors, perhaps not with the nonconformist investors who might be.

Let’s face it, the markets have corrected by 10-12 percent, that’s all. Overall, it’s still much higher than pre-Covid and if you look, many companies are at all-time highs. This is also the best time for real companies and uninflated mature founders to come out.

Every company worthy of its value has to go through multiple seasons, over and over, and the right ones grow and mature from this.

Even in winter, the most elegant of the snow leopards comes out to hunt and be predators, so winter is the time for those who want to build to survive and those who want to be predators.

D: The edtech industry is seeing layoffs. Is it because the funding has run out or is there more?

A: There is absolutely no ‘dry period’. Just because few startups have been insanely funded, lost focus, pushed to grow and diversify are now being forced by those same investors to wake up and smell coffee doesn’t mean there’s a drought.

They have been misled by themselves and their Council and are now correcting themselves, sadly at the expense of esteemed co-workers, but they are the exception, not the trend.

Never in 100 years of education and ‘LifeLongLearning’ has there been a more opportune time to upset the scale and include millions of college students and professionals working to reinvent, retrain and embark on a new path of growth in their careers. India is also brilliantly positioned to open up the higher education market in Asia and around the world.

We at upGrad have stayed away from the arrogance of distraction and have focused on results and impactful careers.

There are no mistakes, there is no better time than now. K12 has gone through its Covid bump and is now seeing the much needed fix, but most of the companies in the edtech industry are just getting started.

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

There were some interesting topics during the three days of the World Economic Forum (WEF) in Davos. Here are some takeaways:

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

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

B) A redevelopment revolution is underway which will be a tsunami in the next decade around the world. Better, accessible and affordable lifelong learning and education digitally can add and will add a whopping $ 8 trillion to global GDP over this decade. Power shifts in countries will occur on the basis that the workforce and their population will be ready for the jobs of tomorrow and will also be the learning capitals of the world.

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

D) There is no doubt that the world will go through a very, very difficult time. With food disproportionately available to countries around the world, the poor will get poorer even if the rich don’t get richer. Covid is not leaving the planet in a hurry, but he has put us all on a health alert enough to even notice monkeypox, something that has been rife in Africa for years but ever since it hit the “western” world.

And the war will not go away quickly and it will be interesting to see how busy the West remains as the war continues or will lose interest if it does not serve its agenda.

The big question we also need to trace is how polarized the world will be over the next two to three years. All of this will require incredible world leaders and leadership in politics and in building businesses and organizations.