With start-ups of all magnitudes that exists in India either at micro or a macro level, some challenges are definitely faced by them. Few of the start-ups are laying off employees in order to do cost-cutting like Swiggy and Oyo, and the ones who are budding in the industries are facing troubles to keep up with the operations. While few of them are even on the verge of shutting down.
Start-ups are facing a crisis wherein they are constantly trying to strategise on their threats and opportunities but it is getting difficult. 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-19 hindrance 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.
According to sources, around 70% startups have cash reserves to last a little over two months.
Nevertheless, the good news is the Indian start-up environment is 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. The Government of India has joined hands with various stakeholders to offer support to startups.