About 90 per cent tech startups in India have reported a decline in revenue and about 30-40 per cent have suspended operations or will close down because of the coronavirus pandemic, warns Nasscom’s recent survey which was revealed on Tuesday.
Nasscom, tech services and startup industry body, has urged last month immediate relief from the government to ensure business continuity for startups amid the nationwide lock-down.
‘Start-Up Pulse Survey’ conducted online and involving over 250 startups in April says, revenue declined by more than 80 per cent for about 34 per cent of such companies.
Almost 70 per cent of travel and transport startups reported suffering 40 per cent revenue decline. Whereas, 14 per cent of edtech, fintech and healthtech startups expect growth in revenue amid the COVID-19 crisis.
As revealed by the survey, 70 per cent startups have runway less than three months, with those in the business-to-customer segment majorly affected.
As per the report, nearly 60 per cent of B2C startups are facing business closure.
Debjani Ghosh, the President of Nasscom said, “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 Artificial Intelligence, Internet of Things (IoT), Cloud.”
“However, to ensure that the Indian start-up movement and its growth trajectory is not derailed, coordinated support from key stakeholders is the need of the hour. Some of our key recommendations to the government include access to working capital, easing compliances and fiscal policy and funding support,” she said.
Analysis of responses was carried out considering factors like growth stages, revenues, employees strength, revenue, verticals, etc.
“The Government can consider providing an option to the employees for a onetime PF opt-out option for the next financial year 2020-21. In such a case, both the employee and employer contributions towards the PF may be transferred directly to the employee. This will result in an increase in the take home pay of the employees,” said Nasscom earlier in the representation made to the government.