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Profitability: The new benchmark for startups seeking investor approval

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Profitability: The new benchmark for startups seeking investor approval

Investors are now demanding that startups demonstrate a clear path to profitability or product-market fit at an early stage. This shift in sentiment comes as many late-stage startups and unicorns that recently went public are starting to show profits. Companies like Zomato and Policy Bazaar, which have reported profits, have seen their share prices rally. This new expectation for profitability is also filtering down to unlisted companies, leading more startups to focus on achieving profitability before seeking further investment. There has been a significant overhaul in go-to-market strategies and a focus on improving unit economics and efficiency. Ultimately, investors are looking for sustainable growth and profitability in order to provide higher valuations.

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