In just three months, the Covid-19 pandemic has undone India’s once-booming startup ecosystem.
About 60% of business-to-consumer technology startups face business closure, while about 40% have temporarily halted operations or closed business in the world’s third-largest technology startup ecosystem, according to NASSCOM (National Association of Software and Service Companies).
Survival of the industry is at stake, the IT industry lobby group said, adding that a whopping 70% of surveyed startups have a cash runway of fewer than three months, the most affected being the early stage and mid-stage startups.
In a report titled ‘Startup Pulse Survey-Q1 2020’, NASSCOM said that two-third of the startups believe that Covid-19 impact will last up to 12 months.
The report also highlighted the lobby body’s recommendations to the government. It has asked for funding support, fiscal relief, made in India procurement, and easing compliance to support startups.
It has urged the government to create a ‘deep tech investment fund’ for startups similar to ‘fund of funds’ that the centre recently unveiled to revive growth for micro, small and medium enterprise (MSMEs).
Respondents from 250 startups participated in the e-survey conducted in April.
NASSCOM’s definition of a startup is an active technology product or platform company that was incepted during the last five years, in 2014 or later, in this case.
According to Hurun Global Unicorn List 2019, India is the third largest ecosystem for startups, behind China and the United States, ahead of Britain and Israel.