IPO Buzz Drives Startups to Rethink Growth & Profitability
The thrust for growth for profit rang loud and clear at fintech giant Razorpay's FTX 25 conference, where founders of startups, investors, and government officials came together to talk about the changing ecosystem. Fintech was the core, but talks also touched upon fast commerce, the effect of GenAI, and the surging tide of startup IPOs.
With 23 startups eyeing public listings by early 2025, the IPO buzz is fueling a shift toward financial discipline. Founders reflected on the stark reality of public markets, where short-term performance pressure contrasts with venture capital's longer timelines.
"Unlike the VC ecosystem, public markets are not so forgiving", said Gaurav Jain, Cenior Vice-president at Sovereign wealth fund GIC. "VC capital isn't tight, but investor sentiment has changed. Startups now analyze investment cycles on a weekly basis and leverage AI to be responsive to evolving consumer tastes".
The focus isn't solely on meeting growth numbers maintaining profitability after going public is increasingly becoming a critical metric. Arpit Chug, Razorpay CFO, pointed out that regular profitability is paramount to maintaining valuations. This comes at a time when listed entities such as Paytm, Nykaa, Zomato, and Ola Electric are still grappling with volatile share prices and illusive profits.
As one veteran VC cracked, "IPO is only an event. The real marriage is what happens after".
Zepto's Playbook for IPO Readiness
Rapid commerce unicorn Zepto's IPO is already being looked forward to. The firm has recently moved its domicile to India from Singapore a clear signal of earnest public listing intentions.
CFO Ramesh Bafna, who earlier worked in finance at Myntra and Flipkart, recognized the rapidly evolving nature of quick commerce. "The sector is changing quicker than we expected. Non-grocery products now lead deliveries, and we track capital spending and investment cycles on a weekly basis, not quarterly", Bafna said.
With startups competing to IPO, the question of how to balance growth and sustainable profits is now the key. Moments such as FTX 25 illustrate that the ecosystem is growing up with founders now realizing the IPO is merely the beginning, not the end, of an ongoing commitment to financial stability and market trust.
The next few months will show how successfully these startups handle the intricacies of public markets. But one thing is certain: profitability is no longer a choice it's a necessity.
