Time and again you must’ve heard in 2021 (108 times to be precise), that a Startup raised funds north of a hundred million dollars. Of course all the news about mammoth valuations took the limelight, but did you ever wonder where these Startups park these fat cheques until they actually want to use them?
We handpicked 5 Unicorns which were flushed with accumulated funds of $1.79 Billion as at 31st March’21, and found out their strategy of dealing with idle funds. Here’s what it all boils down to:
And, here’s how current investments were allocated among different kinds of instruments:
Our observations:
In most cases, within a particular category of investment, Startups choose to diversify across 5-7 funds. For e.g. the 61% allocated to Debt Funds is invested in 5 different funds like ICICI Prudential, HDFC Debts Funds, etc.
On an average, Startups kept up to 3 months of operating cash in their current accounts.
This article is a part of December'21 edition of our Startup Newsletter. Here's the complete publication:
