The ban on TikTok in 2020 birthed a slew of Indian short-video platforms like Trell, Roposo, Moj, Chingari, and Josh. Despite initial investor interest, none have successfully filled the void left by TikTok’s departure. High-profile venture capital firms injected $65.8 million during the peak funding period in 2021, followed by $29 million the next year. Unfortunately, these platforms struggle with rising costs, declining engagement, and user retention issues, leading to waning investor interest.
Trell and Roposo shifted toward a content-to-commerce model, while others, including Chingari and Moj, attempt to compete with major players like Meta’s Instagram in the short-video market. Challenges persist as Chingari reportedly laid off 50% of its workforce, and Moj’s parent company, Mohalla Tech, faced a 38% increase in losses to Rs 4,000 crore in FY23.
In 2023, short-video apps received zero funding, reflecting the broader trend of declining investor interest in sectors like web3, ed-tech, gaming, and cryptocurrency. Ed-tech funding plummeted nearly 90% from the previous year, reaching $297 million compared to $2.6 billion. The once-prominent sectors now face challenges such as market saturation, lack of profitability, uncertain demand, and intense competition.
Investors are cautious and now demand proof of product-market fit and sustainable unit economics before injecting more capital. Sectors that experienced tailwinds during the pandemic, like ed-tech and short-form video apps, attracted substantial capital, but investor enthusiasm waned post-Covid as they reevaluated market size and adoption pace.
In the post-pandemic landscape, direct-to-consumer (D2C) brands, once lauded for convenience and niche products, face skepticism. The over-crowded market and challenges in achieving profitable unit economics contribute to a cooling investor interest in these brands. The shifting dynamics emphasize the need for startups to demonstrate sustainability and align with market demands to secure continued investor support.