Since September 2022, about 750 senior executives (CXOs and CXO-1) out of about 5,000 top professionals (with more than Rs 1 crore salary) exited unicorns and soonicorns. Out of this, about 40% or 300 senior executives decided to move out of the start-up ecosystem to join large traditional companies, according to data put together for ET by Longhouse Consulting.
Also read | As startups cut costs in funding winter, headhunters see flood of resumes
A large majority of these executives were absorbed by traditional Indian conglomerates or large domestic companies such as Reliance, Aditya Birla, Vedanta group, JSW group, Tata group, Kotak Mahindra Bank, among others, which are all focusing on foraying into emerging business areas or incubating digital-first businesses, and are looking for professionals with proven track record from the start-up and ecommerce ecosystem.
“The funding winter and the subsequent cutdown in growth projects have compelled many senior executives from unicorns and soonicorns to look for opportunities with traditional businesses that, on the other hand, are much more stable. They are also scouting for experienced hands from new- age firms to lead their diversification drives into new growth areas,” said Anshuman Das, CEO of Longhouse Consulting.
There is a pull from the larger groups that are looking to rope in seasoned hands to bet in new age businesses.
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Santrupt Misra, Group Director Birla Carbon and Director Group HR for Aditya Birla Group, said: “Large companies are doing their own incubation in adjacent areas. We too have our B2B initiative where we have hired talent from new age companies.”Besides, it also helps large corporations to diversify their talent model and also creates a lot of stir and new thinking in the traditional businesses, added Misra.
Some of the recent top moves include Vivek Gupta, CTO at B2B ecommerce – Aditya Birla Group, who moved from Blinkit; Saurabh Nandi, Senior Vice President, Business Head Pharma B2B at Reliance Retail, who came from Udaan; Ruchi Padhya, vice president, Reliance Retail who moved from Nykaa; Tejomaya Urs, engineering leader at Jio Platforms who joined from Xpressbees; Mrinal Sinha, executive VP, Kotak Mahindra Bank, who was earlier with Cars24; Ashish Vaid Mehta, CFO – smelters, Hindustan Zinc (Vedanta Group), who was earlier with Ola Electric.
The exodus is happening at a time when it has been10 months since an Indian startup entered the unicorn club, data from Longhouse showed. The latest was Molbio Diagnostics in September.
India’s three largest startup investors – Sequoia Capital India (now Peak XV Partners), Tiger Global Management, and SoftBank – have reduced their deals by 80% this year, highlighting the horror of the funding winter.
They were involved in just 12 deals in the first half of 2023 compared to 60 a year earlier.
“Most large conglomerates and established companies today are building digital first businesses and trying out agile business models. These companies are looking to attract seasoned professionals from the startup ecosystem,” said K Sudarshan, managing director, India, and regional chair, Asia, EMA Partners.
Ankur Pahwa, managing partner of the venture capital fund PeerCapital, said: “The innovation agendas in many high growth cash guzzling businesses have taken a back seat in the face of the funding dynamics.” This is also impacting the quality of work and coupled with financial uncertainties and future growth opportunities, is also driving many individuals to consider alternatives like large corporations.