What does Nikhil Kamath think of venture funding in today's world?

Q: What do you think really made True Beacon and Zerodha successful? 

Ans:

>The industries were ripe for a change when True Beacon and Zerodha was founded

>The industries were ripe for a change when True Beacon and Zerodha was foundedThe industries were ripe for a change when True Beacon and Zerodha was founded

 

Q: In the world of startups, your startups stand out because you chose to bootstrap, and then you focused on being cash-flow positive. What advice you want to give to the entrepreneurs thinking to start their own startups? 

Ans:

>Consider what the market is willing to give at that point 

>At a time of high inflation and rising interest rates, raising capital is going to be harder than what it was five to 10 years ago

>Companies should focus on profitability 

Q: Recently we have seen that investors are growing more cautious towards investing in startups. Markets have also not taken the IPOs of several startups very positively. How do you see the future of fintech in India? 

Ans:

>As penetration levels remain low, fintechs continues to be an opportunity 

>Just about 2% of India has access to the equity markets 

>In the mid and long-term cycle, number of people using fintech products will go up 

Q: In this, how do you see the role of Bharat – rural India?

Ans:

>As India’s per capita GDP goes up, the bulk of the growth will come from rural India 

>Hope India doesn’t follow the China-way of urbanisation 

>Expect backward immigration into rural economies in the future

Q: We have seen that inflation in India has been quite high in the past few quarters. How do you think in the coming days it will impact the markets? Have the markets already factored it in? How do you think markets to behave in the near future? 

Ans:

>When inflation peaks, it’s not a one or two quarter phenomenon, but last for years

>Inflation is likely to stay high for a while now. Interest rates will be up  

>If interest rates remain elevated and continue on the current trajectory, it will have significant impact on the consumption on the country, and in turn the stock market

Q: Recently, Sebi introduced this mechanism called ASBA, where the funds are blocked in the account of an applicant of an IPO. Do you think it will have a positive impact on upcoming IPOs?  

Ans:

>No sure if Sebi’s Application Supported by Blocked Amount (ASBA) can have a positive impact

>With ASBA, the amount of money available for IPOs will go down 

>IPOs should not be the dumping ground for early investors, PEs, VCs, foreign investors, promoters etc to retail 

>More opportunities and valuations should be provided for retail investors to participat

Q: Where do you think the next wave of innovation in retail investment will come from? Which sectors do you think is going to be on the forefront of it? 

Ans:

>Expect more innovative companies list on the exchanges

>Expects to see more innovative tech companies than just services play 

>Technologies around climate is going to become a significant sector in the next 10-20 years, like geo-engineering and companies that help alleviate climate change etc