New Delhi: Amid ongoing COVID-19 crisis, 70% startups across the country have been impacted while as many 12% have had to halt operations altogether, said in a survey jointly done by FICCI with the Indian Angel Network (IAN). A total of 250 startups and 61 incubators and investors participated in this nationwide survey.
Investors have put decisions on hold, said 33% of startups while 10% claimed that their respective funding deals with investors have been scrapped in light of the pandemic and the economic uncertainty it has triggered.
In its survey, FICCI found that the Covid-19 pandemic has had an unprecedented impact on Indian businesses and more so for SMEs and startups. The figures indicate that 22% of the startups in India have cash reserves to meet fixed cost expenses over the next 3-6 months.
As per FICCI, 43% of Indian startups have already initiated salary cuts in the range of 20-40 per cent over the period of April-June 2020.
Secretary-General of FICCI, Dilip Chenoy said, “The startup sector is stressed for survival at the moment. The investment sentiment is also subdued and is expected to remain so in the coming months. Lack of working capital and cash flows may lead to major layoffs over the next 3-6 months by startups. The survey indicates that Indian startups need an enabling ecosystem and flow of funds to continue operations.”
Padmaja Ruparel, President of IAN and Co-Chair of FICCI Startup Committee, said investors must play an important role to provide the Indian startups funding, mentoring, and handholding support to stay afloat and come out at the other end of this crisis.
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