There is a need to evaluate the importance of striking a balance between pursuing growth and ensuring profitability, said Harsh Jain, co-founder of financial services platform Groww on July 7.

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According to Jain, who was speaking at a panel discussion at the Moneycontrol's Startup Conclave in Bengaluru on July 7, Groww is performing well in terms of profitability and revenue, and their primary goal is to enhance market penetration and expand their market presence.

Along with Jain, the session was also attended by Ruchira Kalra, founder of fintech unicorns ofbusiness and Oxyzo; and Vidit Aatrey, founder of online shopping brand Meesho, who provided their perspectives on the ongoing discussion surrounding growth and profitability in businesses.

The panellists in the debate moderated by Rajan Anandan, MD, Peak XV Partners and Surge, recognized the crucial role that growth plays in achieving success, especially in competitive markets. However, they also emphasized the importance of profitability and its significance for a business's sustainability.

"We are doing fine in terms of profitability and revenue. We just want to focus on increasing penetration. You need to understand if your growth is conflicting with your profitability," Jain said.

According to Ruchira Kalra, securing funding for B2B startups is a challenge, despite the opportunities for growth in this sector. She emphasized the importance of finding multiple sources of capital early on to ensure the sustainability and growth of a startup.

"India is a land of B2B startups, but it is very hard to convince VCs to fund for B2Bs," she said.

"Finding multiple taps for capital for your business early on is very important for a startup," Kalra added, "For each founder what's important is to look at the quality of the asset you are building. For an investor the value of the asset created by a founder is important," she added.

Kalra highlighted the significance of assessing the quality of the asset being built by founders, as investors place value on the assets created. At Oxyzo, she stresses the principle of ensuring profitability from the very beginning, aiming for a positive net profit after tax (PAT) from day one.

"Lending business has to be a PAT-positive business from day one. Profitability is always PAT at Oxyzo," Kalra said.

She also mentioned that 90 percent of the technology developed by their company in the initial three years is still in use, indicating a strategic and thoughtful approach to technology development.

Meanwhile, Aatrey said their company initially focused on WhatsApp as a distribution channel but later moved their attention to a consumer-centric approach.

He asserted that the company has exceeded Flipkart and Amazon in terms of the user base, and emphasised the need of achieving profitable growth.

"We initially focusd on WhatsApp as a distribution business then we went very consumer heavy. We’re ahead of Flipkart and Amazon in terms of users. Profitable growth is a permanent change of culture, this is how we’ll grow," said Aatrey.

(Edited by : Vivek Dubey)

First Published:Jul 8, 2023 5:35 PM IST