Startups with good business models will continue to attract money: Amitabh Kant

Indian startups that are "well governed" and have good business models will continue to attract investments despite a decline in venture capital funding, said Amitabh Kant, India’s G20 Sherpa.

"When you talk about the winter of money not flowing in, let me just say that 2021 was an exceptional year...I still feel that Indian startups...those which are well governed and have good business models, will get a lot of money," Kant said on Saturday during a conversation with Tata 1mg CEO Prashant Tandon at the TiEcon Delhi 2023 startup conference.

Kant, who is former chief executive of government think tank Niti Aayog, also said that India would soon see Indian companies, family businesses, insurance and pension funds set aside money to invest in startups. "I don't think money will ever be in short for those startups," Kant said.

His comments come at a time when startups are struggling to raise funds amid increased market volatility and macroeconomic concerns. Many Indian startups have also resorted to layoffs in a bid to cut costs.

ET has reported earlier, citing Venture Intelligence data, that venture funding in Indian startups fell by a third to $23.9 billion in 2022 from $35.5 billion in 2021, as the turbulence in the technology sector made investors skittish, severely hitting late-stage fundraising. The number of deals fell to 1,130 in 2022 from 1,215 in 2021.

On the opportunities for Indian startups, Kant said the market for Indian new-age companies is "not just the 1.4 billion people of India, but the next 4-5 billion people of the world entering the middle class".

He also talked about the importance of improving ease of doing business and the government reducing compliance burdens for companies.

"Government should only do policymaking; wealth creation is the private sector's job. Startups should focus on disruption," said Kant.



On Prashant Tandon’s question on the measures needed from the government to simplify regulations, Kant said, "The way forward is to make things easier and make India the easiest nation to do business in."


"Just scrap all rules, regulations and procedures so that no Act, to my mind, should be more than three pages long, no rules should be more than two pages, and no form that you guys fill up should be more than five or six columns, and it should all be digital," Kant said. “Nobody should have a physical interface with the government...and we should be able to solve all the problems of our citizens digitally.”