The recent IPOs of foreign-backed giants Swiggy and FirstCry have ignited debates about India’s widening startup valuation divide. While these listings drew massive investor interest, they also spotlighted the struggles of homegrown “desi” startups to secure comparable valuations. What fuels this gap—and can Indian startups bridge it?
Foreign IPOs Shine: Swiggy & FirstCry’s Billion-Dollar Debuts
Backed by global investors like SoftBank and Prosus, Swiggy (food delivery) and FirstCry (babycare) are targeting lofty valuations:
– Swiggy: $10+ billion (per DRHP)
– FirstCry: $4 billion
Their success stems from three key advantages:
1. Deep-pocketed investors funding aggressive expansion
2. Brand credibility tied to marquee backers
3. Perceived scalability in public markets
Why Indian Startups Lag in Valuation Race
Comparatively, Indian IPOs like Paytm, Zomato, and Nykaa faced post-listing slumps—some losing 50–70% of IPO value. The root causes:
1. Investor Trust Deficit
- Global vs local backing: SoftBank’s name alone attracts IPO demand, while domestic VCs lack similar clout.
- Profitability concerns: Indian startups often prioritize growth, while foreign-backed firms highlight unit economics early.
2. Regulatory & Market Risks
Paytm’s RBI restrictions and Nykaa’s competition struggles spooked investors. Foreign firms diversify risk via cross-border revenue.
3. Short-Term vs Long-Term Play
Public markets reward sustainable margins over GMV growth—a shift many Indian startups missed.
Bridging the Gap: What Desi Startups Must Do
- Focus on profitability before IPO, not just top-line growth
- Strengthen governance to attract institutional investors
- Leverage India-specific narratives (e.g., Bharat-focused models)
Conclusion: Time for a Valuation Reset
The Swiggy-FirstCry boom underscores an urgent need for balance. Indian startups must align with public market expectations, while regulators should incentivize domestic capital. Without change, the divide will only deepen.
— NextMinuteNews
