Paytm, Zomato, BigBasket, others could run into India’s great FDI wall

NEW DELHI/BENGALURU: India’s top startup unicorns — including Paytm, Zomato, BigBasket and Dream11— that count Chinese investors among their largest backers are likely to face delays in raising capital after the government said all foreign direct investments from the world’s second-largest economy would be subject to its approval first.

A slew of growth and early-stage companies, too, which were in talks with Chinese investors for new investment rounds, will likely face difficulties, while follow-on rounds from existing backers may become increasingly complex to execute, according to investors, lawyers and startup founders.

“Companies like mine, where they (Chinese investors) already hold a 33% strategic position, are in a tough spot. No one will touch us in this environment,” the founder of a unicorn told ET, requesting anonymity. The latest missive could potentially put future funding rounds on hold or at least take longer to execute, he added.