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Info Edge, that runs sites like Naukri.com, today has a market cap of about Rs 32,200 crore, while IndiaMart has a market cap of about Rs 5,500 crore. Nasdaq-listed MakeMyTrip has a market cap of about $2.6 billion and Nykaa has a private valuation of about $724 million.
Championing the need to have profitable businesses at the fourth Tie Global Summit, Sanjeev Bikhchandani of Naukri, Falguni Nayar of Nykaa and Dinesh Agarwal of IndiaMart discovered over the course of the session that their climb up the entrepreneurial ladder comically started on the same date.
One reason could be the plain convenience associated around starting on April 1. “March 31 was my last day at GE Capital, and I was clear I wanted to start my company at the start of the financial year. It makes things easier,” MakeMyTrip, Founder and Group CEO, Deep Kalra tells ET online.
However, for young entrepreneurs and those harbouring a dream of starting up, the karmic connection ended there. The panel, including TiE Delhi NCR, Chairman Emeritus, Saurabh Srivasatava, were of the view that great companies take time to build and it is important for companies to make profits. “We have recent examples where the public market valuation of a company was far different from private market valuations. If your company does not generate profits, sustainability of the business will be questioned,” says Srivasatava.
Bikhchandani, who is considered as one of the foremost authority in the Indian entrepreneurial space, says the best way to build a startup is still through the good old bootstrapped way. “Bootstrapping is a great experience as it teaches you the value of money. You learn to do more with less and you develop a sharp focus on the customers’ needs and problems,” says Bikhchandani.
Bikhchandani adds that Naukri has always remained profitable, except during the first year of its existence, which meant it did not have to rely on outside funding. “The only round we raised was for Rs. 7 crore, of which we used Rs. 5 crore to go to the next level of growth. The next round we raised was the IPO,” says Bikhchandani.
IndiaMart’s Agarwal says that his company always remained profitable, but it took about 20 years for substantial profits to flow. “It was only around 2015 that we started to see sizeable profit. The going is often slow,” says Agarwal. Started in 1996, the B2B marketplace survived the 2000 dotcom burst and has adjusted well to the dizzying heights of India’s e-commerce sector. It listed on the Bombay Stock Exchange (BSE) in July this year.
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