Startups are rearranging their leadership teams, aiming for sustainable profitability in the long term.

In the past year, more than a dozen startups in the new economy sector have appointed new chief executives, reflecting a heightened emphasis on profitability and governance within the industry. At Third Wave Coffee, founder Sushant Goel has transitioned to a board role, while Rajat Luthra, former head of KFC India, has taken over as chief executive, effective April 1.

According to a venture investor from a global firm, the transition from startup to scale-up requires different leadership skills, making these changes beneficial for companies reaching a certain level of maturity.

This trend is expected to continue gaining momentum. "The appointment of a professional CEO should be seen as a positive development," noted the venture investor. Similar leadership changes have occurred at warehouse automation firm GreyOrange.

With funding becoming scarcer in the technology and startup sectors over the past year to year and a half, companies are facing investor pressure to prioritize profitability, reduce cash burn, and pursue sustainable growth. The reshuffling of top leadership teams in many cases reflects this shift, as industry insiders explain.

Anshuman Das, cofounder and CEO of staffing firm Longhouse Consulting, views this trend as a clear indication of the industry's focus on achieving profitability and undergoing a significant reevaluation. For instance, at Dealshare, backed by Alpha Wave Global and WestBridge Capital, Kamaldeep Singh was appointed CEO in January this year as part of an investor-led restructuring effort.