Funding squeeze causing stricter evaluation of e-commerce models
The funding Scenario in the Startup world has changed in 2016. Due to this change the Indian e-commerce ecosystem had to adopt stricter evaluation norms for their business models, now focusing more on profitability and consolidation. With the inflow of fresh funding decreasing and the focus on profitability by investors increasing, leading it to swift changes in business model by companies. The current wave of consolidation among e-commerce players may intensify, leading to fewer, stronger players emerging within each category and the recent government regulations which prevents discounts and dependence on large vendor may require changes in strategy in future The hyper-valuations seen in successive funding rounds in 2014-15 also seem to be correcting. Fidelity had marked down its holding in Flipkart by about 40 per cent as of February 2016. Valuation of Rocket Internet’s Global Fashion Group (parent company of Jabong) sinked by about 67 per cent during its last fund raise in April 2016, while Fabfurnish was acquired by Future Group at a substantial discount for USD 3 million. It?s a summarization of an article from Economic Times.
For details, visit http://economictimes.indiatimes.com/small-biz/policy-trends/funding-squeeze-causing-stricter-evaluation-of-e-commerce-models/articleshow/52364495.cms
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