Happiest Minds: Startups are 8% of our business; no slowdown yet for well-funded outfits

The startup space has recently been rocked by news of mass layoffs and funding slowing down to a trickle, owing to various factors, including the geopolitical. Against such Happiest Minds Consulting sees a silver lining.

The IT consulting and services company, which says startups make up 8 percent of its clientele, has chalked out a 10-year plan in which it aims to achieve $10 billion in revenue.

Speaking to CNBC-TV18, Joseph Anantharaju, Happiest Minds' Executive Vice-Chairman and Chief Executive Officer — Product Engineering Services, said the company hasn't seen a drop in demand. "The last three months, I've been traveling quite frequently nearly every week trying to get a sense of how customers are viewing the market and managing their budgets. I must say that, at a broad level, we have not seen any drop off in demand," he said.

On the recent volatility among startups, he said the churn has been observed only in those outfits that have a higher cash burn. "Startups can be classified into well-funded (or slightly advanced stage) startups and those which are in the early stages and have higher cash losses. We don't have any customers in the (latter) segment," Anantharaju said.

He said their clients are usually funded into Series B, C, and D, and spend their funds on product initiatives. "With the other customers, 96 percent of our business comes from digital and we're not seeing any drop-off in spend on cloud, AI, ML, automation, because they are very necessary for customers to sustain their growth," he added.

He said the recent retrenchment in the startup world is basically companies moving money budget into higher priority items without increasing their expenditure. "But having said that, customers are keeping a close watch on both the political and macroeconomic front," Anantharaju added.