Topline revenue growth priority for 38% of startup founders, according to Inc42’s annual ‘Indian Startup Founders’ Survey’
24% founders in the survey said that they would focus on operating profit in the next fiscal year
After cutting their marketing budget in FY23, startups are expected to increase their marketing and IT spend between 16% to 30% in FY24
The funding winter continued to plague the Indian startup ecosystem throughout 2022, with layoffs and shutdowns becoming a norm. As investors became cautious, profitability became the buzzword during the year.
Taking stock of the situation, many startups took steps to cut down costs and turn profitable to increase their runway. It seemed as if this was a decisive shift towards profitability from revenue growth.
Download Annual Funding Report 2022However, according to Inc42’s annual ‘Indian Startup Founders’ Survey’, topline revenue growth will be the top priority for Indian founders in FY24. For 38% founders, topline revenue remains priority compared to 24% founders who will be focussing on operating profit.
The focus on topline revenue growth indicates that despite the slowdown, most of the startups will continue to make efforts to increase their market share.
The survey was a part of Inc42’s annual funding report 2022 and saw participation from more than 150 Indian startup founders.
As per the survey, about 78% founders do not anticipate annual revenue slowdown in FY23. Perhaps this is the reason for the founders prioritising revenue growth over turning profitable.
Among other key findings, two out of five Indian startups reduced their annual marketing budget in FY23 to conserve cash. However, they plan to increase their marketing and IT spend between 16% to 30% in the next fiscal year.
Other than lowering marketing spend, the startups also took other measures to conserve cash such as taking a conservative market expansion approach, reduction in new hires, and salary cuts at top management.
However, in what may come as a good news for jobseekers, Indian startups plan to increase their headcount by as much as 15% in FY24 to scale up their businesses. 71% of founders said that they do not plan to slash new hires, as opposed to 29% founders who said they could reduce new hires in the next financial year.
Amid the funding winter, Indian startups raised $25 Bn in funding in 2022, a decline of 40% from $42 Bn raised in 2021, according to Inc42 data. Startups listed on the exchanges also faced the brunt, as eight out of the 11 new-age tech stocks listed in 2021 together shed over INR 2.1 Lakh Cr (more than $30 Bn) in market capitalisation this year.
Download Annual Funding Report 2022
