The ability to build a profitable business that generates free cash is a sign of resilience, Infosys co-founder and Aadhaar's architect Nandan Nilekani said in an exclusive interview to ET NOW on Monday.
Reacting to the challenges in corporate and startups as a result of Covid19, Nilekani said, "One of the key things we have realised is startup ecosystem is dependant on raising capital. That is well when you have liquidity but then you become really fragile when there are no funds"
He added that businesses must be profitable and generate free cash in order to be resilient. "Infosys generates $2 Billion free cash annually and gave a dividend of half a billion this quarter. We need to bring back the notion that you have to be profitable, generate cash flow and fund your own destiny," he said.
Nilekani who co-founded Infosys and played a crucial role in Aadhaar and UPI has also been investing in startups since 2014.
"Great companies of the tech world have always become profitable, be it Google, Facebook or Amazon. China's Bytedance posted $3 Billion profit just a few years after starting up," he said.
Talking about the road to normalcy and recovery in the aftermath of Covid19, he said it will take some time but it will give an opportunity for companies to become stronger.
"There are a lot of opportunities for India as a viable sourcing option for global companies because there is a lot of dependence on China. The service industry has shown a lot of opportunities" he said.
The last few weeks has seen layoffs across unicorns, startups, media and financial services companies. Infosys too is reportedly planning to cut down on the number of senior roles in the organisation.
Reacting to the challenges in corporate and startups as a result of Covid19, Nilekani said, "One of the key things we have realised is startup ecosystem is dependant on raising capital. That is well when you have liquidity but then you become really fragile when there are no funds"
He added that businesses must be profitable and generate free cash in order to be resilient. "Infosys generates $2 Billion free cash annually and gave a dividend of half a billion this quarter. We need to bring back the notion that you have to be profitable, generate cash flow and fund your own destiny," he said.
Nilekani who co-founded Infosys and played a crucial role in Aadhaar and UPI has also been investing in startups since 2014.
"Great companies of the tech world have always become profitable, be it Google, Facebook or Amazon. China's Bytedance posted $3 Billion profit just a few years after starting up," he said.
Talking about the road to normalcy and recovery in the aftermath of Covid19, he said it will take some time but it will give an opportunity for companies to become stronger.
"There are a lot of opportunities for India as a viable sourcing option for global companies because there is a lot of dependence on China. The service industry has shown a lot of opportunities" he said.
The last few weeks has seen layoffs across unicorns, startups, media and financial services companies. Infosys too is reportedly planning to cut down on the number of senior roles in the organisation.
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