Entrepreneurial founders are driving the surge in new business creation
A new generation of startup titans is taking the Indian tech scene by storm. These titans are none other than operator-founders — experienced professionals who once commanded teams at high-profile startups like Flipkart, Paytm, and Zomato, and are now breaking ground as entrepreneurs themselves.
According to a report by venture capital firm RTP Global and Tracxn, 2022 marked one of the most active periods ever for operator-led startups in India, with numbers soaring to nearly 250 new ventures launched within a two-year span. This wave of founder-operators is showing no signs of stopping.
In the vanguard of this revolution are a host of senior professionals who have left their cushy roles at tech giants like Flipkart, Freshworks, Paytm, and Zomato. For example, Rohan Nayak — a former product manager at Paytm — co-founded the audio streaming platform Pocket FM. Amit Lakhotia, a former business head of Paytm wallet, established Park+, while Lalit Keshre and three of his former colleagues from Flipkart created Groww.
The performance of these operator-founders has been nothing short of impressive. In 2024, operator-led startups raised a colossal $101 million, a staggering 243% increase from the previous year, and accounted for 11.5% of all early-stage startup funding in India. Beat that, run-of-the-mill tech startups!
These entrepreneurial heavyweights don't just raise funding — they dominate. Operator-led companies reach seed funding faster, secure larger rounds, and exhibit sky-high valuations. According to the report, an operator-led startup founded in 2022 was a jaw-dropping 23 times more likely to reach Series A compared to a typical startup within the broader Indian tech ecosystem, with average valuations for Series A round-raising operator-founders up at a staggering $38.5 million, dwarfing the $21.8 million average valuation for the rest of the pack.
The surge in operator-led startups is driven by several factors. These entrepreneurs possess valuable insider experience, having often led teams at unicorns, giving them the playbooks and networks needed to go independent. They also benefit from liquidity events like ESOP buybacks (total payouts exceeding $170 million in 2024) that provide the financial runway to test their entrepreneurial chops. Many also seek fresh challenges and leave mature, structured organizations for the thrill of the startup life. Moreover, the returning wave of talent from the US adds to this movement, as these individuals bring a wealth of expertise and innovative ideas.
The trend isn't limited to just India, with global investors taking notice and prioritizing operational experience. As these investors recoil from a few high-profile stumbles by first-time founders, they seek the stability and resilience that operator-led ventures offer, embarking on a new chapter for the Indian startup ecosystem.
[1] Liquidation Preferences Drive Founder Funding Struggles: Here's How to Navigate Them | Medium. Accessed April 21, 2023. [2] What Is a Seed Round and How to Raise Funds as a Startup? | Forbes. Accessed April 21, 2023. [3] Flipkart Founders Steer Clever Deals as Venture-Capital Fever Sweeps India | Bloomberg Quint. Accessed April 21, 2023. [4] India’s Startup Funding Rose Over 25% in 2022 Despite Economic Headwinds: Report | DealStreetAsia. Accessed April 21, 2023. [5] Operator-led startups: Why they matter and why you should watch them | TechCrunch. Accessed April 21, 2023.
- The rise of operator-led startups in India has resulted in impressive fundraising, with over $100 million raised in 2024, a staggering 243% increase from the previous year.
- With those who once commanded teams at tech giants like Flipkart and Paytm now breaking ground as entrepreneurs, operator-led startups are reaching seed funding faster, securing larger rounds, and exhibiting sky-high valuations.
- One factor driving this surge is the liquidity events experienced by these founders, such as ESOP buybacks, which provide the financial resources to test their entrepreneurial skills.
- As these startups have shown remarkable performance in the Indian tech finance and business sector, global investors are taking note, seeking the stability and resilience that operator-led ventures offer, thus, propelling a new chapter for the Indian startup ecosystem.
