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COVID-19 pandemic impacts 70% startups in India, says FICCI

COVID-19 pandemic impacts 70% startups in India, says FICCI
COVID-19 pandemic impacts 70% startups in India, says FICCI

The ongoing coronavirus outbreak has had a massive impact on the startup ecosystem of India. As per the combined survey by Indian Angel Network (IAN) and FICCI, the coronavirus outbreak has impacted the businesses of around 70% startups in the nation.

According to sources familiar with the knowledge of the matter, the survey titled ‘Impact of COVID-19 on Indian Start-ups' shows that only 22% of the startups have ample cash reserves to meet cost expenses of their ventures over the next 3-6 months. Moreover, around 12% of startups have closed their operations and 60% are working with disruptions.

As per the survey, 68% of the startups are reducing their operational and administrative costs, while around 30% of the companies have said that they would lay off employees if the lockdown extended for too long.

On the investment front, 10% of the startups said that investors have called off their investment, while 33% of companies said that investors have put their decision on hold. The report also stated that 43% of startups have commenced salary cuts in the range of 20%-30% over the period of April – June 2020.

The report highlights the urgent need of relief package for startups including potential purchase orders from the government, swifter tax refunds, and tax relief. The reports also stated that immediate financial support measures including soft loans, grants, and payroll grants also need to be offered.

Along with 250 startups, the agencies also studied 61 investors and incubators in the survey. Around 96% percent of investors stated that investments in startups have been impacted by pandemic. Further, 92% of investors said that startup investments will continue to be low over the next half year.

Around 59% of the investors said that they would prefer to work with their present portfolio companies in the forthcoming time while only 41% said that they would consider new deals.

 

 Source Credit - https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/about-70-per-cent-startups-impacted-by-covid-19-survey/articleshow/76801147.cms