"To make a successful new business is one which employs people, creates jobs and employment, and it is a sustainable and profitable business you can run it for a long time.
Infosys co-founder and Axilor Ventures Chairman Kris Gopalakrishnan on Friday made a strong case for startups to think of Initial Public Offering (IPO) in order to tackle the fund crunch situation and provide longevity to their fledgling enterprises. “Startups are hesitant to do IPO, which is not difficult. My biggest issue with the startup ecosystem today is that they are not doing an IPO. Let the Indian public own these companies. They get the wealth being created,” he said while inaugurating the 5th edition of the two-day ‘Seeding Kerala’ organised by Kerala Startup Mission (KSUM) here.
“India has USD two trillion of wealth in private hands. Less than one per cent is invested in startup ecosystem. We need High Networth Individuals (HNIs) money going into startups,” he added. Gopalakrishnan advised startups to take minimum funds from angel, friends and families. They have to create minimum viable product, and establish unit economics and profitable model, he underlined.
“To make a successful new business is one which employs people, creates jobs and employment, and it is a sustainable and profitable business you can run it for a long time.
“Longevity is the best measure for the successful business. Society needs stable businesses that create good jobs and creates wealth for the society. Our best late stage startups are owned by non-Indian entities. More than 95 per cent of funding comes from non-Indian entities,” he said. Noting that Kerala community is innovative, entrepreneurial and action-oriented, Gopalakrishnan said the startup ecosystem in the state is getting recognition for its innovation, ideas and path-breaking initiatives.
“Studies have shown that Micro, Small and Medium Enterprises (MSMEs) sector is the backbone of any economy. More than 60 per cent of jobs are created through them,” he said. Interestingly, maximum number of jobs are created in the first five years of the businesses of startups and there is a need for a large number of MSMEs, he added.
“New jobs are created only if new businesses are created. We need to have best milieu for new business for maximum job creation. Among the companies with largest market capital in the world today, except Amazon, rest of them employ very few people. There are significant opportunities today to disrupt any business,” he said. Gopalakrishnan said India today has one of the most advanced fintech ecosystems, which even the US is also looking to implement. He also suggested creation of a database of viable businesses leveraging local strengths and ecosystem.
“We need to identify people passionate about starting a business and train them on business basics, including running business legally and ethically. They can select a business from the database and get trained on the business idea, followed by registering it,” he explained. Gopalakrishnan also interacted with 10 startup founders on the sidelines of the event.
M Sivasankar, Principal Secretary (Electronics and IT), government of Kerala, who presided over the function, said, “One of the ways to address scarcity of fund is to tap the funds from the alumni meet of engineering batches. Besides, we need to create networks of people, who believe in Kerala to invest.” In his welcome address, Saji Gopinath, CEO, KSUM, said India is the third largest ecosystem for startups.
“We have close to around 28,000 startups registered in Department for Promotion of Industry and Internal Trade (DPIIT) and 60 per cent of them are located in three of four cities. This shows the high growth of non-Indian industries, which play a pivotal role in growing such ecosystem. But in Kerala, we have the most homogenous startups.” The investment summit brings together leading figures in the country’s startup ecosystem besides senior government officials. KSUM is the nodal agency of the Kerala government for entrepreneurship development and incubation activities in the state.