US Shutdown: Indian Start-ups Can Cope In Short Term, Says Instamojo’s Sampad Swain

As the US shutdown drags on, business groups are demanding the immediate reopening of the government while economic indicators show that the standoff has already hurt consumer spending and consumer confidence. Indian start-ups with cross-border operations are not hit yet, but a setback could not be ruled out if the deadlock continues. We bring you a series of quick chats with entrepreneurs and start-up experts who are closely tracking the situation in real time. Today's chat is with Sampad Swain of Instamojo.

Operating from Mountain View (California) and Mumbai, Instamojo, Inc., is not even 2 years old but its online peer-to-peer platform for selling digital goods has gained significant global traction. A part of the 500 Startups’ Fall 2012 batch, the start-up claims to have many key customers across the US and we are keen to figure out if the ongoing government shutdown would hit the Indian start-up ecosystem operating out there. In a quick chat, co-founder and CEO Sampad Swain admits that macroeconomic issues could be damaging, but start-ups not directly dealing with the government, should not be worried. Here are the excerpts from our chat.

Will the current shutdown affect cross-border start-ups?

I don’t think Indian start-ups with cross-border operations are facing any threat yet. At this point of time, I am trying to develop the domestic market, but we see continued interest from the US and European markets. Things have not changed much in spite of the stand-off. Also, I think the shutdown will not affect Instamojo, an online P2P platform for selling and buying digital goods.

If consumer confidence is hurt, shouldn’t it impact C2C businesses like yours?
Not necessarily. I think long-term crises like the subprime crisis or the ongoing rupee-dollar fluctuation may impact our business in the long term. But the US shutdown, I feel, is a short-term thing and it can’t go on for an indefinite period. Entrepreneurs and businesses are always ready for such short-time scenarios.

Do you think the shutdown will impact seed-stage or early-stage funding?
I doubt if there will be any such impact. But then, any macroeconomic issue prolonged over a period of time leaves its mark. Just like the subprime crisis did before.

Of late, VCs have been cautious about India investments. Will they now focus more on emerging markets?
That is highly unlikely as VCs take their call keeping in mind a larger time frame. Short-term disruptions will not make them change their policy.

Will there be negative sentiment among start-ups looking to expand their businesses in the US?
I think any start-up not focusing on selling directly to the government should not be worried. Most likely, it will be business as usual.

Watch this space tomorrow for the final interaction with one of the biggest Indian-global start-ups.