'80% startups a racket': Suhel Seth defends Piyush Goyal amid row

Businessman, brand guru, and columnist Suhel Seth has come out strongly in support of Union Commerce Minister Piyush Goyal’s recent critique of the Indian startup ecosystem, accusing a majority of founders of prioritising personal wealth over building sustainable businesses.

"Eighty percent startups in India are nothing but a racket," Seth said during a TV debate. "The first thing that these startup founders do is buy themselves Lamborghinis and homes in Amrita Shergil Bagh and big apartments."

Also read: Are we happy being delivery boys & girls: Piyush Goyal asks Indian startups to raise the bar, do better |WATCH

'Where are our innovations?'

Seth, who is the founder and managing partner of the consultancy firm Counselage India, echoed Goyal's concerns about the lack of innovation in the Indian startup space. “I am in total agreement with Piyush Goyal. India, if it has to make a meaningful contribution, has to be innovative. Where are our innovations?”

"We keep talking about our software prowess... have we produced a Facebook? No. Have we produced a Google? No. Have we produced anything that is innovative which is a global brand? The answer is no. So you can keep defending 'Oh, but we're doing great stuff,' make statues of yourselves. Startups are not changing the world."

Seth take a dig at Zepto's Palicha

Seth also took aim at Zepto co-founder and CEO Aadit Palicha’s comments that startups are driving employment and FDI, calling the argument illogical. “Are startups an employment exchange? No. We need the incremental value that startups will provide. And this is all a game of valuation. Which person in the world starts a business with a view to get out of it? That's what most of our startup founders do. They want to make money fast and get out of the business,” he said.

He questioned the ethics of founders drawing massive salaries while their companies remain in the red. “When was the last time you paid yourself Rs 100 crore when your company was losing Rs 3,000 crore? These guys are doing it,” he added, while clarifying he wasn’t referring to all startups.

'Startups and VCs in a racket'

Seth went a step further, accusing both startup founders and venture capitalists of colluding in what he described as a “racket.” Citing Softbank founder Masayoshi Son, he said, “The so-called geniuses who created Softbank India, how they punted and messed up every deal they did. So please save me this whole thing that startups are the next big thing after sliced bread. They aren't.”

Also read: boAt co-founder Aman Gupta backs Piyush Goyal's call for startups to dream bigger, push deeper into AI

Goyal's call for innovation parks industry debate

The sharp comments come amid ongoing debate triggered by Goyal’s remarks on April 3 at the inaugural ceremony of the second Startup Mahakumbh, where he said Indian startups need to “go global and think big,” rather than focusing largely on food and grocery delivery services.

“When we look at deep tech, there are only about 1,000 startups in the ecosystem, and it is a disturbing sign. It is upon the startups to focus either on wealth creation in the short run or rising to the international scale,” Goyal said.

The minister’s comments sparked backlash from industry veterans, including former Infosys CFO Mohandas Pai, who accused Goyal of belittling Indian startups. Goyal, however, stood by his statements, calling the criticism “unfortunate.”