Startups meet commerce minister Piyush Goyal, discuss ways to boost growth of ecosystem

MUMBAI: A clutch of unicorn startups in a meeting with commerce and industry minister Piyush Goyal on Wednesday discussed the possibility of establishing a unicorn club or simply put, an association of startups which would regularly engage with the minister’s office and suggest measures to boost the growth of the ecosystem. In the meeting which lasted for about four hours, startups also urged the minister to look at the possibility of easing the esop (employee stock ownership plan) taxation framework, founders who attended the meeting said. Representatives of some 40-50 unicorn startups including Zerodha, Zepto, Oyo, CarDekho, Paytm, and Flipkart were in attendance.
The meeting which comes against the background of a tepid funding environment also saw deliberations around the need to expand availability of domestic capital for supporting startups. The minister, it is learnt, suggested unicorn startupsto consider possibilities of setting up a fund which could be used to financially back fledgling startups. “At present, a lot of startup founders invest in young startups in individual capacities. The idea is to look at ways by which they could instead contribute to the fund and help other smaller players,” said Rikant Pitti, co-founder at EaseMyTrip. “Several small startups today struggle to get funding from banks. If they are supported by bigger ecosystem players, it could ease some of these challenges,” Pitti said.
Funding for Indian startups declined to a seven-year low of $8.2 billion in 2023. This compares to investments of about $25 billion that firms had managed to garner from investors in 2022. Hit by the funding crunch, several startups laid off employees while some shut operations. “On policy led solution, there was discussion on how to enable startups operating in India but with legal entity outside shift its domicile to India without bearing a huge tax burden,” said another unicorn founder who did not wish to be named.