Rohit Chokhani, Principal Founder, White Unicorn Ventures, which launched a $20-million venture fund this April, spoke to BusinessLine on the year gone by and the outlook for the $45-billion e-commerce industry in 2017.

What were the major happenings that punctuated 2016 in the e-commerce industry?

Over 100 start-ups shut shop in 2016 as they were unable to raise further funding, and even well-funded start-ups like Peppertap and Fashionara closed down as they failed to cover the basic cost per item sold, a case of bad unit economics and zero vision to profitability.

Consumer sentiment, which surpassed all expectations, with millions of products sold in the festival season in October, turned moderate to negative due to demonetisation, and this will continue for the next six-eight months.

Is investor sentiment set to turn positive in 2017?

Yes. You will see many more Series A, B and C rounds being raised in the next 18-24 months because all the bigger funds like Accel Partners, IDG Ventures, and Kalaari Capital, among others, are sitting on millions of dollars that need to deployed within the life-cycle of the fund.

What is your outlook for the industry?

A majority of e-commerce start-ups that are still incurring losses on every product sold will focus on getting their unit economics right, and on cutting down losses.

That’s not just because they will be forced to do it in order to raise funds but because it is a matter of survival.

As an investor, I would look at the next big opportunity that will emerge in the edtech and healthcare spaces.

Here, start-ups will create disruptive offerings in secondary learning (9th–12th standard), test preparations, and remote diagnosis, psychological counselling and geriatric care.

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