Capital Expenditure

Also called CapEx

Capital expenditure: money spent to acquire or upgrade long-lived assets like equipment, servers, or buildings, whose cost is spread over years rather than expensed at once.

Why it matters

Most software startups are light on CapEx, which is part of why they scale so capital-efficiently. For hardware, manufacturing, or deep-tech founders, CapEx is a major planning and financing question.

For example

A manufacturing startup spends 2 crore on machinery, a capital expenditure it depreciates over ten years rather than expensing all at once.

Related terms

Operating Expenses Depreciation Free Cash Flow

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

eChai Partner Brands