Indian Startups Bleeding: 70% Have Cash Reserves For 3 Months; 60% Can Close Down
Who Are Affected The Most?
According to a survey by technology industry body Nasscom, with nine in 10 startups registering a decline in revenues and a little over third halting operations temporarily or permanently.
Further, the worst-hit segments are early and mid-stage businesses, especially in the business to consumer space.
As per the Nasscom findings, around 60% of all B2C startups were facing closure, two months into the nationwide lockdown that has so-far kept businesses shut.
What Are The Findings Of This Survey?
This was a two-month-long survey, which received responses from over 250 startups across sectors, found that 92% reported a decline in revenues.
Moreover, the report added that 40% of startups have either temporarily halted operations or are in the process of shutting down, with around 70% having cash reserves to last less than 3 months.
The president of Nasscom, Debjani Ghosh said “To ensure that the Indian startup movement and its growth trajectory is not derailed, coordinated support from key stakeholders is the need of the hour,”.
He further added, “Some of our key recommendations to the government include access to working capital, easing compliances and fiscal policy and funding support,”.
According to them, over 70% of startups in the travel and tourism space have seen revenues decline by over 40%, while 50% of fintech and logistics businesses have seen a similar dip.
Interestingly, the only bright spots for the startup sector were seen in ed-tech with 14% businesses reporting an increase in revenue, while B2B startups seem to be facing lesser revenue drops.
Although, the sector which now employees 4,00,000 people directly across 9,300 technology startups, it is fighting back with 54% of respondents in the survey saying they were looking to pivot their businesses.
While servicing categories such as healthcare and edtech that are growing to increase utilization of technologies such as artificial intelligence, blockchain and IoT, startups are looking at different ways to survive.
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