Indian Startup Founder Salaries Down Amid Funding Challenges
New Delhi, March 9 – Salaries for startup founders in India experienced a substantial decrease during the financial year 2023-24 (FY24), according to a recent report. The average salary for 54 founders, representing 30 Indian tech startups, fell by 25.4 percent to Rs 5.44 crore, down from Rs 7.3 crore in the previous year. These founders collectively earned Rs 291.5 crore in salaries during FY24.
The drop in founder salaries aligns with a difficult period for the Indian startup ecosystem, marked by an ongoing “funding winter” that began in 2022. This slowdown has forced many companies to take cost-cutting measures.
The government did announce the abolition of angel tax in the Union Budget presented in July 2024 to facilitate funding, but the impact on the broader trends is still unfolding.
The report attributes the decline in investments to global uncertainties, including the Russia-Ukraine war. Consequently, total funding for Indian startups plummeted from $42 billion in 2021 to $25 billion in 2022, and further to just $10 billion in 2023. Funding trends have shown little improvement in 2024.
Facing this financial strain, numerous startups have implemented measures to cut costs, such as reducing marketing expenditures, laying off employees, and restructuring their operations. Some companies have even ceased operations as a means of survival.
The report further revealed that while some startups managed to remain profitable, others struggled with significant losses. The 30 startups analyzed reported a total operating revenue of Rs 73,715 crore in FY24. Out of these, 11 startups incurred combined losses of Rs 4,876 crore, while the remainder reported total profits of Rs 7,960 crore.
The report also included a ranking of the highest-paid startup founders in FY24. Supam Maheshwari, the founder of FirstCry, retained the top position, with an annual salary of Rs 103.8 crore. However, this figure represents a nearly 50 percent decrease from the Rs 200.7 crore he earned in FY23, as stated in FirstCry’s red herring prospectus.
Founders of Zerodha, Nikhil and Nithin Kamath, ranked second in terms of salary. Nithin earned Rs 33.5 crore in FY24, a 30 percent drop from Rs 48 crore in the previous year. Nikhil’s salary stood at Rs 33.9 crore, a 29 percent decrease from FY23. However, when considering other income sources, their total remuneration was Rs 96 crore each.
