Reportedly startups in india are suffering dearly because of the novel coronavirus. An alarming 70 per cent of startups across the country have been impacted by Covid-19 while as many 12 per cent have had to halt operations altogether. Investors have put decisions on hold, said 33 per cent of startups while 10 per cent claimed that their respective funding deals with investors have been scrapped in light of the pandemic and the economic uncertainty it has triggered.
The responses were gathered by The Federation of indian Chambers of Commerce and industry (FICCI) as part of its nationwide survey 'Impact of Covid-19 on indian startups'. This survey was conducted jointly with the indian Angel Network (IAN). A total of 250 startups and 61 incubators and investors participated in this nationwide survey In its survey, FICCI found that the Covid-19 pandemic has had an unprecedented impact on indian businesses and more so for SMEs (Small and Medium Enterprises) and startups. The figures indicate that 22 per cent of the startups in india have cash reserves to meet fixed cost expenses over the next 3-6 months.
Moreover companies that are not laying off employees have had to cut salaries. As per FICCI, 43 per cent of indian startups have already initiated salary cuts in the range of 20-40 per cent over the period of April-June 2020. While cash reserves are depleting, investments across the board seem to be dipping. Currently most of the companies are waiting for relief packages, including possible purchase orders from the Centre and state governments along with tax relief or swifter tax refunds. They are also hoping for immediate fiscal support measures in the form of grants, soft loans, or payroll grants.
