Startup shake-up: Founders make way for veterans

Startups are restructuring at the top level as founders make way for more seasoned executives, either from within the organisation or an external hire, to lead their ventures. 

Recently, news aggregator startup InShorts co-founder Azhar Iqubal assumed the title of chairman after relinquishing his CEO role to co-founder Deepit Purkayastha; similarly at Mygate, Vijay Arisetty became chairman when co-founder Abhishek Kumar was appointed CEO. 

Speciality coffee and food brand Third Wave Coffee announced co-founder and CEO Sushant Goel’s move to becoming a board member. Rajat Luthra, former CEO of Kentucky Fried Chicken (KFC) India & Nepal (Devyani International Limited), will take over from Goel in Q1 FY25. 

There have also been changes at the top deck at warehouse automation firm GreyOrange, e-commerce firm Dealshare, logistics startup Porter, and dairy products brand Epigamia. 

Profitability in focus 

Growing in number since March 2023, these executive transitions signal a focus on profitability and governance in the startup ecosystem. 

This trend is expected to gain more momentum in the coming year, according to industry executives. 

“The trend highlights the emphasis on the path to profitability within the startup ecosystem, leading to a thorough reassessment by both founders and professional management in the past year,” said Anshuman Das, CEO and co-founder, Longhouse Consulting. 

From inception to growth stage

Industry insiders welcomed the appointment of experienced hands as a move in the right direction since any business, much like a growing individual, requires varying levels of management, leadership, and nurturing at different stages of its development. Firms planning to go public are also bringing in professional executives to lead the charge. 

“The skill set and management style that propel a company from inception to its initial stages of growth (from 0 to 1) differ significantly from those needed to scale it further (from 1 to 10 and beyond),” said Anirudh A Damani, Managing Partner, Artha Venture Fund. 

“As companies evolve from startup phases to high-growth and then mature businesses, possibly eyeing IPOs, the complexity of operations necessitates a shift in leadership style,” he added. 

In January this year, in an investor-led restructuring at WestBridge Capital-backed social commerce unicorn Dealshare, Kamaldeep Singh was elevated as CEO. 

Co-founders Sourjyendu Medda, Vineet Rao and Sankar Bora quit the company over a period of three months.  

Less on plate 

Another reason why founders are stepping off the daily treadmill is to focus on newer initiatives. 

Mygate CEO Kumar said his predecessor had been reducing his day-to-day involvement in the company over the last 6-9 months.  

“As I stepped into the CEO role, Vijay, now Chairman of the board, shifted his focus towards strategic initiatives and mentorship, gradually stepping back from day-to-day operations,” he said. 

Similarly, Epigamia co-founder and CEO Rahul Jain said that as the company began to focus on profitability, the management — earlier led by co-founder Rohan Mirchandani — felt the need for a more hands-on approach. 

Goel of Third Wave Coffee said, “As I transition to the board, I am excited to continue contributing towards our vision and growth from a different vantage point. Rajat is a veteran in the QSR [quick service restaurant] industry, and I am filled with optimism on what the future holds for Third Wave Coffee under his stewardship.” 

Goel will continue to guide the company and develop new initiatives for Third Wave Coffee, the company said. 

Serial entrepreneur Mukesh Bansal stepped down as chief of Cultfit in October last year and was replaced by senior executive Naresh Krishnaswamy. 

As more and more founder-led firms usher in professional management talent, it marks a new phase in the evolution of India’s startup ecosystem.