When Byju’s acquired White Hat Jr for $300 million, folks on LinkedIn went crazy. “Good Lord — how could someone create so much value in just 18 months?”
Today, the company is losing more than Rs 1,000 crores a year. And I won’t even get into the other controversies it got into earlier.
When PharmEasy acquired Thyrocare, we again saw an outpouring of celebratory disbelief that a six-year-old unicorn acquired a 25-year-old company. People were raving about the ‘Indian startup ecosystem’ and how it has entered the golden age!
Today, if reports are to be believed, PharmEasy is seemingly struggling with that acquisition.
I have no comment on these specific companies and I wish them all well.
But often, the reality is not what it seems. Headlines are misleading. And we celebrate too prematurely.
I recently saw another example: When Tatas placed orders for 500 planes, apparently, there was much euphoria and self-congratulatory celebration. For what?
If you have cash, buying planes is easy. So is acquiring companies, buying IPL ad spots, or for that matter, buying anything in the world.
The hard part is not spending money but getting it back, with an attractive return, in an ethical manner.
That is when the champagne should flow – not earlier.
Never jump the gun.
– Rajan