Karthik Reddy, the CEO of Blume Ventures believes that there is an undeniable attraction to high startup valuations, but it must be pointed out that they are only as valuable as their selling price on the market. He pointed out the need for a recalibration and improved understanding of how to assess start ups, especially in view of market corrections, as well as recognizing current trends where some portfolio stars are being reduced to conservatives.

Speaking to this in an interview, Reddy said, “Any venture person will be half lying if he says we looked only at value over valuation. All of us were greedy for valuation, but you know that it has a limited time stamp upon it because eventually you have to make money for your investors and for that, you have to be able to sell at that valuation. So selling price is the valuation”.

“A Lot of the industry’s portfolio- the stars in the portfolio are significantly marked down to conservative values today. So we have all adjusted to how to value companies better at this juncture. So going forward, once that correction happens then everybody recalibrates to saying now we have found value to be at par adjusted for risk”, Reddy added.

Reddy also underscores the Importance of stamina and a decade’s commitment to establishing a successful track record in the venture capital landscape. Also he pointed out the importance of rising funds & startup valuation based on a strategy chosen, while advising peers who want to replicate Blume’s success. Reddy warned that too much capital would lead to poor returns. Moving on, Karthik Reddy expresses optimistically about the future of the Indian economy, he urges the country to make a significant investment in the field of financial technology. He thinks that India’s ambitious goal of reaching $10 trillion in GDP could be driven by the use of financial technology innovations.

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