Startups seem to be the new casualty on the list of those infected by COVID-19. According to a month-long survey conducted by IT trade body Nasscom, nine out of 10 startups are facing a decline in revenues. More than two-thirds of startups in India need to secure additional capital in the coming weeks to steer through the coronavirus pandemic.
The survey also showed that 30 to 40 % of the total participant startups in India have halted their operations temporarily or permanently. 70% of startups have less than three months of cash runway in the bank, and another 22% have enough to barely make it to the end of the year.
Amidst uncertain times, Nasscom has also highlighted that more than half of the startups responded are looking to move on with new business opportunities. About 54% of some 250 respondents said they were looking to pivot to new business opportunities, and 40% said they wanted to diversify into growth verticals such as healthcare.
The major decline in revenues was reported by travel and transport startups. Aside from that, fintech, supply-chain management (SCM), and logistics startups are also seeing a significant drop in revenues. “Out of the blue, this flourishing growth saga has suddenly been hit by a roadblock… the COVID roadblock” said Debjani Ghosh, President, Nasscom, in the report. “There is no country, business, or living being that has not been affected by the COVID pandemic.”
As a silver lining, the Nasscom report highlights that 14 percent of edtech, fintech, and healthtech startups are expected to grow their revenues.
