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Billion $ startups offer Rs.1 cr salaries

Flush with investor money and valuations topping a billion dollars, a small but fastgrowing group of Indian startup superstars is fuelling a new wave of wage inflation in the Indian technology sector.

The likes of e-commerce leader Flipkart, which raised $1 billion recently, and mobile advertising network InMobi are attracting mid-level executives and technology professionals with annual salaries of over a crore of rupees, something unheard of a couple of years ago.

An angel investor says a startup with good funding is willing to pay a Rs 1croreplus package to its senior tal ent. Bash Gaming, FusionCharts, Eka Software, Capillary, Indix, Freshdesk and Knowlarity are said to be paying senior management executives an overall compensation that is close to or more than Rs 1 crore. TOI could not independently confirm these figures. The elite billion-dollar valuation club of privately held companies includes e-commerce major Snapdeal and data analytics firm Mu Sigma, besides Flipkart and InMobi.

Salaries for techies in Bangalore, India's Silicon Valley, saw the first bump up in the late 1990s and early 2000s when Infosys, Wipro and the like were building the IT services ecosystem.It's now the e-commerce and IT product startups that are beginning to repeat that phenomenon.

“Guess where wage inflation is super high and unfunded smaller startups are feeling embattled -Silicon Valley. It's no different in India now,“ says Ravi Gururaj, chairman of the Nasscom Product Council and cofounder of the innovation lab Frictionless Ventures. A suggests it is not the Indian startups that bhay Singhal, co-founder of InMobi, are leading the wage inflation, but the US ones with whom Indians have to compete. “I don't think startups are fuelling wage inflation. We pay more than Indian IT services firms, but we offer competitive salaries, on a par with Google, Facebook,“ says Singhal.

InMobi competes with Google's AdMob, and Flipkart and Snapdeal with Amazon, which has just committed $2 billion to its Indian operations.

Indian startups have also been hiring hundreds of IIT and IIM graduates with top offers. “Entry-level salaries in IT services haven't changed substantially in the past few years, but startups looking at niche skills are willing to pay a premium,“ says Kris Lakshmikanth, founder of the search firm Headhunters India. The demand for talent in product management and product tech far exceeds supply .

For smaller startups that have not raised much capital, the current wage inflation is worrying. K Sudarshan, MD at the executive search firm EMA Partners, says salaries will stabilize once the startup ecosystem matures. “Those for whom funding has been shaky have suffered and many have shut down,“ says Raghunandan G, co-founder of Bangalore-based TaxiForSure, a techbacked transportation startup which has raised more than $40 million in venture capital since its inception three years ago.

Gururaj says smaller companies will have to get creative with intangible benefits and lures such as fancy titles, overseas travel, and opportunities to speak at important events. Stock options are another element many talented professionals are comfortable with. Ashish Goel, co-founder and CEO of the online furniture portal Urban Ladder, says his company gives its “team members a greater ownership in the company“.

There's also a big positive in these salaries for the startup ecosystem. Many who were happily ensconced in large MNC IT services companies in India on account of their salaries are today willing to experiment with startups. “Heavily funded startups with their high valuations create access to a talent pool that would otherwise never consider startups as a career option.

Source: TimesOfIndia

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