Meet the founders who braved the funding winter chill

The cold within him froze his old features, nipped his pointed nose, shrivelled his cheek, stiffened his gait, made his eyes red, his thin lips blue; and spoke out shrewdly in his grating voice. A frosty rime was on his head, and on his eyebrows, and his wiry chin. He carried his own low temperature always about with him; he iced his office in the dogdays; and didn’t thaw it one degree at Christmas.
—Excerpt from A Christmas Carol, by Charles Dickens

Some 180 years after Dickens penned this novella, the protagonist’s name has become synonymous with the cold-hearted and tight-fisted. The man with the frosty rime and iced office in this allegory is Ebenezer Scrooge, an antithesis of the Christmas spirit and joie de vivre.  

Let’s quickly cut to the chase and the topic at hand—the Forbes India cover story on outliers in a funding winter—and extend the Scrooge metaphor to the moneybags fuelling startup activity, the venture capitalists (VCs).  Like Scrooge who, when younger, plunged headlong into the yuletide festivities, the good VCs were till not too long ago warm, blithe and generous. Until circumstances got the better of them—both Scrooge and the VCs—and they transformed into prudent pinchpennies.

A Christmas Carol does end on a happy note with the good cheer and spirit of Christmas re-entering Scrooge. And, to complete the Scroogian analogy, 2023 ended with the funders once again loosening the purse-strings—albeit, selectively.

In this fortnight’s cover package, Rajiv Singh identifies a bunch of tech startups that have defied the much-touted ‘funding winter’ to snare a funding round of at least $50 million. This is in a year when total funding plunged to $11.62 billion (till December 25) from $25.2 billion in 2022 and a record $38 billion in 2021, as per data compiled by startup data platform TheKredible.

More, if 2021 and 2022 were the years of the unicorn, with 26 and 44 startups hitting $1 billion-plus valuations, respectively, 2023 saw the emergence of just two—quick commerce play Zepto, at $1.4 billion courtesy of a Series E round of $200 million, and fintech firm InCred, which raised $60 million in a Series D round at a valuation of $1.03 billion.

Clearly, from the VC viewpoint, the Scrooge effect kicked in last year, after two years of abundance. As the liquidity tap tightened at the start of 2023 and losses piled up at many unicorns and other fattened roasts started showing, the revelries met an abrupt end. Austerity, profitability paths and selective bets became the buzzwords.

On the cover are three founders who’ve braved the chill to become magnets once again for funds. Consider Bizongo, a vendor digitisation platform, which raked it in between 2016 and 2021 in four rounds, that last one of $110 million. Series E concluded two years later, at $50 million.  

What has changed? Plenty, co-founder Sachin Agrawal tells Singh.  ‘Sustainable growth’ replaced ‘high growth’ as the mantra and compliance became a watchword. “We were perhaps the only startup working with all the big four auditing firms at the same time,” says Agrawal. For more on that journey from overexuberance to realism, turn to ‘Almost a unicorn’.

Also on the cover is Ankit Agrawal, founder and CEO of InsuranceDekho, which raised $210 million in 2023 in two rounds from investors that include Goldman Sachs Asset Management and Mitsubishi UFJ Financial group. “The ones building sustainable businesses will end up raising capital,” Agrawal tells Singh. For more on that story, and many more of wintry good cheer, the cover package on startups that braved the funding frost makes for a delightful and inspiring read.