By AltG Research on behalf of Taponeel Mukherjee & Poornima Vardhan
Last week in India was dominated by the down round that PharmEasy faced and the ongoing legal battles at BYJU'S. As startups globally reprice in a non-ZIRP world and technology investors dust off their finance books to rediscover the much-vaunted "Free-Cash Flows", Indian startups face the same challenges.
But, as with all market reactions, the over-exuberance of 2021 has been replaced by the over-pessimism of 2023. India remains the fastest-growing major economy in the world and the place for investors to pay close attention to. Ironically in the great Indian Startup Sale of technology businesses, the real value lies in these startups' offline assets. While for PharmEasy, the value lies in the diagnostic business of Thyrocare (we wrote about this extensively here https://bit.ly/3PMR9SS), an opportunity of a decade, on the other hand, for BYJU'S, the value lies in the offline tuition centre business of Aakash.
India remains a place where Offline will be the big winner. We see value in hybrid models to assist the offline business models or "Phygital"; however, pure online business models will struggle, barring a few. We've written about this extensively here https://bit.ly/3oCrLnH. We at AltG get shocked at the inability of certain investors to appreciate the intricacies and business models that India needs for successful investments. Cookie-cutter models are going to suffer and suffer badly.
Therefore, as the Indian startup unwind happens, there are incredible opportunities in the various corners of the market to tap into highly valuable business opportunities, especially businesses focused on hybrid models that reside within the tech startups. The APEXX Formula tells us that attractive opportunities abound in acquiring such assets at attractive valuations, given the general lack of capital and distress in the market. Given India's tremendous growth trajectory, you're on the greatest trade of the 21st Century. PharmEasy and Thyrocare are the beginning.