Snapdeal's Kunal Bahl defends startup cash burn—if it builds long-term value

Snapdeal cofounder Kunal Bahl said startup cash burn shouldn’t be demonised—so long as it is tied to long-term value creation. Speaking at the TiE Delhi-NCR Summit, Bahl argued that strategic spending on technology and customer acquisition, while not traditional capex, contributes to building equity.

“Startups invest in tech and customer acquisition—not capex, but it’s still building equity. So we shouldn’t demonise cash burn if it’s done with clarity,” Bahl said.

His comments come amid growing scrutiny of startup financials, particularly in high-burn sectors such as quick commerce, which collectively loses about Rs 5,000 crore each quarter.

Bahl compared startup burn to early-stage investments in traditional sectors like steel or infrastructure. “Even airports or steel plants burn cash initially. The question is—do you know why you’re investing?” he said.

Share pledges, governance, and clarity

Bahl’s remarks come as governance and financial discipline gain urgency in India’s tech ecosystem. Founders such as Zepto’s Aadit Palicha and Kaivalya Vohra have pledged founder equity to raise capital—an uncommon move in startup circles, more typical of promoter-led traditional businesses.

Much of the current burn is attributed to user acquisition, discounting, and rising operational costs— echoing the 2014–2016 ecommerce wars between Amazon, Flipkart, and Snapdeal.

Bahl, who also runs early-stage investment firm Titan Capital, said the fund works closely with founders to define unit economics and margin targets.

“Margins are the soul of the business. Whether you’re building a 30%, 60%, or 80% margin company—you need to know,” he said.

Titan Capital’s new fund

Titan Capital, founded by Bahl and Snapdeal cofounder Rohit Bansal, has raised Rs 333 crore for its new opportunities fund, marking the first time the firm has raised external capital.

The fund focuses on follow-on investments in existing portfolio companies, with an average cheque size of Rs 15 crore. Investors include prominent family offices, chief executives, and startup founders.

Since 2011, Bahl and Bansal have invested in over 280 startups, including Urban Company, Mamaearth, OfBusiness, Razorpay, Unicommerce, and Ola Cabs. Notably, they exited Urban Company with a nearly 200 times return on their nine-year-old seed investment.

The new fund aims to support around 20 companies, investing in pre-Series A and Series A stages, leveraging high-signal data to make informed decisions.

Titan Capital has also made recent investments in startups like Boba Bhai, Karban Envirotech, and DevDham, continuing its focus on early-stage ventures. “We’re in it for 15–20 years, so we don’t face situations where startups burn unsustainable cash without clarity,” Bahl said.