Synopsis
The financial year 2023-24 saw a sharp decline in startup founders' salaries in India, with an average salary drop of 25.4% to Rs 5.44 crore. This downturn reflects the ongoing funding challenges faced by the startup ecosystem amid global uncertainties.Key Takeaways
- Founders' salaries decreased by 25.4%
- Average salary now at Rs 5.44 crore
- Funding for Indian startups fell sharply
- Government abolished angel tax
- High losses reported among startups
New Delhi, March 9 (NationPress) The salaries of startup founders in India experienced a notable drop in the financial year 2023-24 (FY24), with the average pay for 54 founders from 30 Indian tech startups decreasing by 25.4% to Rs 5.44 crore, down from Rs 7.3 crore the previous year.
This decline in founder compensation occurs amidst a challenging startup ecosystem grappling with a significant funding slowdown, leading to a combined salary of Rs 291.5 crore for these founders in FY24.
The reduction in salaries coincides with the ongoing “funding winter” that has impacted Indian startups since 2022.
In response to this challenging environment, the government announced the removal of angel tax in the Union Budget presented in July 2024.
The decrease in investments has been attributed to global uncertainties, including the Russia-Ukraine conflict, as stated in the report.
Total funding for Indian startups plummeted from $42 billion in 2021 to $25 billion in 2022, and further fell to just $10 billion in 2023.
Funding trends show little improvement in 2024, prompting many startups to implement cost-saving strategies such as slashing marketing budgets, conducting layoffs, and restructuring operations.
Some have even ceased operations altogether to navigate the downturn. The report notes that while a few startups managed to stay profitable, many faced substantial losses.
The 30 startups evaluated reported a total operating revenue of Rs 73,715 crore in FY24. Among them, 11 startups collectively incurred a loss of Rs 4,876 crore, while the remaining reported a total profit of Rs 7,960 crore.
The report also identifies the highest-paid startup founders for FY24. Supam Maheshwari, founder of FirstCry, maintained the top position with an annual remuneration of Rs 103.8 crore.
However, this figure marked a nearly 50% decrease from the Rs 200.7 crore he earned in FY23, as detailed in FirstCry’s red herring prospectus.
Zerodha’s founders, Nikhil and Nithin Kamath, secured the second position in terms of earnings. Nithin earned Rs 33.5 crore in FY24, reflecting a 30% drop from Rs 48 crore in the prior year, while Nikhil’s salary was Rs 33.9 crore, down 29% from FY23.
When factoring in additional income sources, their total compensation amounted to Rs 96 crore each.
