Overheated startup sectors may see a reset

Chennai: 2020 was a year of polarisation for startups and will not be forgotten in a hurry by founders and investors alike. While mobility, travel and hospitality startups struggled to stay afloat, it was a moment of reckoning for edtech, social content, and enterprise software innovators who emerged as the flavour of the season.

Entrepreneurs and investors TOI spoke to said the startup ecosystem, like all spheres of the economy, saw a ‘K-shaped recovery curve’ in 2020. The strong got stronger and the weak kept getting weaker, they said. While the year of Covid gave rise to 11 unicorns, it simultaneously sounded the death knell for numerous upstarts. Even as entrepreneurs joined forces through M&As to tackle the pandemic, the absence of Chinese money in the ecosystem resulted in muted large dollar deals in an already difficult year.