Murthy’s Family Office Cautions as Startup Valuations Plummet Amid Fund Exits

Why in the News?

Catamaran Ventures LLP, the $1.3 billion family office of Infosys co-founder N. R. Narayana Murthy, has raised concerns about India’s overheated startup ecosystem, pointing to steep valuation corrections of 30–40% as funds rush to exit investments.

Speaking to Bloomberg, Catamaran president Deepak Padaki said that “middling startups struggling with growth that don’t have a clear path to profitability … are being sold at discounts of 30–40%.”

Opinions that the report recorded

Many funds are offloading startup stakes before reaching the end of their investment cycles—a key driver behind the valuation correction. Padaki emphasized that Catamaran is steering clear of deals requiring heavy operational turnaround.

The bulk of Catamaran’s portfolio remains in public markets and select technology holdings. Its assets include stakes in SpaceX, Elon Musk’s space venture, and the National Stock Exchange of India Ltd. (NSE), alongside a handful of Indian tech startups.

Reflecting its caution, Catamaran has invested in only two startups since the start of 2024. The firm also expressed skepticism toward minority investments lacking strategic control.

Catamaran is now shifting investments toward sectors such as manufacturing, aerospace, electric vehicles, electronics, and potentially medical devices. These sectors align with India’s push toward self-reliance and benefit from “patient capital.”

India’s Decline in Funding

India’s startup funding has declined noticeably over the past five years. After peaking in 2021 with record inflows of around $36–38 billion, investment momentum slowed sharply. Funding fell to about $25 billion in 2022 and then plunged to just $10 billion in 2023, marking the worst year in nearly a decade as investor sentiment cooled and valuations reset. While 2024 showed some recovery with inflows climbing back to around $11–11.6 billion, the rebound was modest compared to the highs of 2021. In 2025, however, the trend appears to be softening again—India’s startups raised only $4.8 billion in the first half of the year, down about 25% from the same period in 2024, with full-year projections indicating another decline. Overall, the funding cycle has moved from a boom in 2021 to a prolonged correction, with investors increasingly prioritizing profitability and fundamentals over aggressive growth.

Analysts note that at least 55 startups across fintech, SaaS, and consumer internet sectors have accepted lower valuations since January 2023, according to Tracxn data. The current trend signals a structural reset in investor sentiment, with sharper scrutiny of profitability and sustainable growth.