Businesses that can beat downturn blues

FOR SOME, IT IS BAPTISM BY FIRE

Debojyoti Ghosh & Swati Anand | TNN

Bangalore: For all entrepreneurs who feel that getting venture capital funding in times of downturn might be tough, here's a sunny story. Suresh Narasimha, CEO of TELiBrahma, received venture capital funding of $2 million two months ago. Narasimha, who started the company around 2004, is seeing the positive side of the slump. "As an entrepreneur, this is the time to focus on the actual value of your business and differentiate it with more propositions,'' he says.
    TELiBrahma is a Bangalore-based mobile solutions company, which currently has 50 employees. The company powers solutions like bluetooth-based mobile advertising, promotions, enterprise solutions and location-based social networking and appears unaffected by the slowdown. Experts believe there are other sectors too that may do well, no matter what the current situation of the economy is. "Sectors like healthcare, education, consumer goods and retail as well as media and entertainment are bound to do well. The slowdown is not that severe in India as yet,'' says Pradeep Kanakia, national head of markets at consultancy firm KPMG.
    As for the IT sector, the focus has shifted from pure services to products, and technology in education and healthcare. At IDG Ventures, for instance, six of the nine companies that received funding from them are product companies. "We believe there are certain sectors that are truly recession-proof, like security, medical sciences and technology in defence and remote monitoring, says Sudhir Sethi, managing general partner, IDG Ventures India.
    In the slowdown, companies will invest less in new capital and would like to extend the life of existing capital assets. Hence demand for remote management and predictive maintenance technologies is expected to grow. "A major construction company has used such a technology from ConnectM and has already seen a 15% cost saving,'' says Sethi. Energy management too is seen to be an area that will gain in such times, since it is a major cost for most companies. "Gifting is an area that might see downtrading, but will not stop. Hence our investment in the online initiative Myntra,'' says Sethi. "Avionics, autoelectronics and robotics will continue to do well.'' Laura Parkin, executive director of National Entrepreneurship Network (NEN), cites the example of an entrepreneur who runs a snack food company: "The company has grown by 10% in recent times. The entrepreneur told me that since people have stopped eating out, they buy more snack foods and eat at home.''