Startups, including early-stage, focusing more on fundamentals than growth

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Staffing firms see a spike in demand for quick commerce workers “Startups began several initiatives during the pandemic and the cost of marketing was extremely high. As things stand today, we are getting the sense that margins are more established and they are more focused on retention," Rahul Chowdhri, an investor at Stellaris Venture Partners, said.

While growth parameters may vary based on the stage of the startup and the segment it operates in, Chowdhri outlined that on average, early-stage startups may need to show 3-4X growth a year, which can then decrease to even 50% growth at the time of exit. While mid- and late-stage startups continue to grow, he anticipates healthier metrics such as positive unit economics that will help companies grow in a sustainable manner.

As growth is fundamental to venture investing, early-stage startups are expected to deliver prolific growth to show that there is potential for disruption in the market. “The ability to produce such outcomes is more possible today as every company in India has room to grow because of the overall expansion of the market, distribution channels and customer needs," said Dipanjan Basu, co-founder at Fireside Ventures.

However, the growth becomes unreasonable when a company burns excessive money to acquire customers outside its target market, or gives discounts more than required, or aggressively expands beyond areas of specialty. “As companies scale, we definitely look for more sustainable growth (that enhances value without sacrificing financial health) that can be repeated every year," Basu said.

Merak’s Bahl concurred. “Startups should aim for steady, incremental growth, ensuring their business models are resilient and adaptable to market changes," he