Startups in India have been thriving for the last three decades. This trend was on a continuous rise as the country provided a perfect breeding ground for startups. However, things are not so fruitful for businesses post Coronavirus. According to Kris Gopalakrishnan, an IT industry veteran and co-founder of Infosys, a quarter of startups in India will not be able to withstand the disaster of Coronavirus.
Startups are exciting but they are usually fragile. They usually succumb to financial burdens and this is what exactly the pandemic brings with it.
Problems For Startups In India:
Almost all startups face similar problems but with Coronavirus, businesses face problems that were not seen before. The situation is uncertain and it is a panic for startups. Some problems faced by startups in India amidst Coronavirus India are,
- Loss of business: this includes loss of customers, revenue, business opportunities and more
- Uncertain times: Due to Coronavirus India, businesses are not sure what is going to happen next. Nobody knows when this pandemic will end and how? This is preventing businesses to set goals and estimates.
- Inability to meet expenses: Unlike established businesses, startups usually don’t have the ability to meet their expenses without any revenue. Loss in revenue results in the inability to pay salaries, taxes, and other expenses. Without a revenue stream, these businesses can’t even buy goods essential for their business process.
- Loss of focus: When a business owner is worried about so many things, how can he focus on his actual goals?
All these things are making the future of startups in India very gloomy – considering the fact that Coronavirus India is not going away anytime soon.
Wha Are The Experts Saying?
Kris Gopalakrishnan said,
“About 25 percent of the startups have less than six months of runway. They will be in serious trouble if the recovery does not happen in six months, it does not look like (happening within that period).”
Former president of CII said,
“I would say 25 percent of the startups will face serious challenges. If they are able to get additional investment, they will survive otherwise they will fail. Not all of them, some of them will fail,”
He also said that the 75% remaining startups in India are also going to go down if the problem persists for long.
Chairman of Axilor Ventures said,
“There will be more failures unless they get additional funding from existing investors or support from banks on working capital or support from the government for some form of debt or grants. We will see more companies get hurt as this prolongs,”
Startups In India: Opportunities Amongst The Crisis
Kris Gopalakrishnan is also hopeful and thinks that every challenge presents new opportunities. According to him, as more and more people begin to practice social distance and begin to accept lockdown, e-commerce is going to boom. He explained these opportunities by giving an example of ride-hailing services. As no one is using services like Uber, Ola, etc. their vehicles can be used in delivering items to homes.
No expert has yet said it, but we at India Tech Desk believes that Work From Home trend is here to stay. And working from home demands a stable Internet, computer/laptop desks, and other accessories. People/businesses looking for an opportunity – WFH is exactly that. There are tons of other opportunities as well. All you need is an eye and a will to grab it.
The startups in India are going through tough times – we can all agree on that. But, we say, let’s not make it an excuse and look for opportunities in the problem itself.
Stay Home – Stay Safe!