The tremendous attraction of investing in a startup that is making endless losses among investors

- Persistent losses, pouring in new funding every year, despite almost negligible assets, rush for startup funding and investment

There is a rush to invest in startups in the world and especially in India right now. Use technology to order meals or snacks at home, transfer money, call a man for house cleaning or beauty treatment or pay bills for various items, order a taxi or deliver goods to your relatives through a third party or get a loan without signing a single paper. There are many such startups in the market.

As the investment in such startups continues to grow, there are currently 3 startups in the country valued at over અ 1 billion. The country's top 100 startups have seen an investment of ૧૦ 10.8 billion in 2021. This start-up is not making a profit even though the money is coming in huge. Constantly making losses.

This glimpse of success is spectacular but now a few different figures are needed. In the last financial year, all these startups together have incurred a loss of ત્રણ 3 billion, or Rs 4,500 crore. Not a single startup is making a profit yet. Let it go, only 30 per cent of the country's top 100 startups are operating profitably. The remaining 80 per cent is not only enough to make a profit from its sales or revenue but also from its operating expenses (salaries, rent, electricity bills, production costs, raw material costs). To spend this he has to constantly raise new money and his losses continue to grow.

Zomato is the largest food delivery company in the country. Yet the company's losses are growing faster than its revenue. The company had a revenue of Rs 2 crore in 2016, which increased to Rs 206 crore in 2020, but the loss increased from Rs 105 crore to Rs 2 crore. The company has to add new finance to the business every year to continue its operations.

The situation with Paytm, which facilitates payment and investment, is no different. The company intends to raise Rs 15,000 crore in the last ten years by bringing in the largest public issue in the history of India's capital market. One2Communication Limited, which owns Paytm, had a revenue of Rs 2,118 crore in March 2020, which declined to Rs. 3 crore. The company's operating loss was Rs 5,610 crore in 2020, which has come down to Rs 15 crore in 2021. The company has also reported net losses. The company has been adding a whopping Rs 2,500 crore to its business for the last two years to keep the business afloat.

Even so, Paytm is the most valued startup in the country! It is worth ૬ 15 billion, or Rs 1,50,000 crore. The market estimates that it will increase to Rs 1,50,000 crore after the public issue. If this happens, it will be ranked 7th among the most valuable companies in the country - surprisingly, it will be worth even more than ATPC, the country's largest electricity company, or Indian Oil, the largest oil marketing company.