India’s startup growth story lacks fundamentals - Part 2

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Editor's note: ShareChat made an interesting confession this year. “In hindsight, we overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze,” the Bengaluru-based company said in an email to its employees in January. Last valued at $5 billion, the short video-sharing platform had just laid off 20% of its workforce.  In recent months, similar statements have been made by several venture capital investors and startup founders. Amid the ongoing venture funding crunch, investors are increasingly admitting that startup valuations are inflated and that almost everybody bought into unrealistic growth stories in the bull market of 2021. But the problem runs deeper than “the highs of 2021”. Yesterday, we wrote about how Indian consumer internet startups and investors have overestimated the real size of the market. We covered retail e-commerce and grocery, arguing that the years of explosive growth are over.  Today, we look at three service sectors—food delivery, edtech and media—and then the bigger economic picture. Food delivery’s limited appeal The successful listing of Zomato two years ago opened the doors …