Coronavirus is the biggest challenge that India’s start-up ecosystem has faced so far, with about 90% of start-ups facing a decline in revenues, 30-40% temporarily halting their operations or in the process of closing down and 70% start-ups having a cash runway of less than 3 months, according to a survey conducted by industry body Nasscom.
The covid roadblock has impacted the early stage and mid stage start-ups the most, according to the survey, with startups in Edtech, fintech and health tech expecting growth in revenue.
"However it is not all doom and gloom; more than half of the start-ups are looking to pivot to new business opportunities, diversify into growth verticals like healthcare, and enhancing focus on emerging tech like AI, IoT, Cloud," said Debjani GHosh, President, Nasscom.
54% of start-ups are looking to pivot to new business opportunities, 40% want to diversify into growth verticals like healthcare while 50% want to 50% Start-ups consider Artificial Intelligence as a big technology opportunity, according to the survey of over 250 startups with diverse profiles.
According to the report, immediate government intervention is essential for the survival of start-ups. Around 70% start-ups are looking for policies that support easing of regulations and opening up of Government procurement while about 50% start-ups are looking for partnership opportunities and others looking for support to reimburse immediate fixed costs.
To ensure that the Indian start-up movement and its growth trajectory is not derailed, Nasscom recommends coordinated support from key stakeholders. "Some of our key recommendations to the Government includes access to working capital, easing compliances and fiscal policy and funding support," said Ghosh.
The Indian start-up ecosystem continues to be the 3rd largest Tech Start-up ecosystem in the world, being the foundation of India’s innovation story, with over 9,300 tech start-ups, providing direct employment to over 400,000 people.