Indian startups need attention: Nasscom
21 May 2020, Mumbai: Nasscom President Debjani Ghosh on the impact of global pandemic on Indian startups said, “The growth story of Indian tech industry, specifically the startup ecosystem has been often repeated with many countries emulating its success mantra. Out of the blue, this flourishing growth saga has suddenly been hit by a roadblock: the COVID roadblock. While governments have been working diligently to protect and save human lives, businesses have been hit and small businesses and start-ups have been the most affected”. “The Indian start-up ecosystem continues to be the 3rd largest Tech Start-up ecosystem in the world, being the foundation of India’s innovation story, with over 9,300 tech start-ups, providing direct employment to over 400,000 people. I believe that there is light at the end of the tunnel and we will emerge stronger and wiser from this crisis”, she said adding further. To gauge the impact of COVID on Indian start-ups, Nasscom undertook a month-long survey, the findings of which are presented in the report titled ‘Reviving the Indian Startup Engine During COVID-19’.
Looking at the situation with an optimistic view she said, “Yes, the situation is grim -90% start-ups facing a decline in revenues, ~30-40% temporarily halting their operations or in the process of closing down and 70% start-ups having a cash runway of less than 3 months, the most affected being the early stage and mid stage start-ups. 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 AI, IoT, Cloud”.
Advising further she opined, “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 the key recommendations to the Government includes access to working capital, easing compliances and fiscal policy and funding support”.
The report findings covers five imperatives for the Indian start-up ecosystem to navigate COVID19, those are Survival Strategy-Look for pivots & new opportunities sectors, focus on customer relevance; Government Push-Drive and incentivize production and adoption of ‘Made-in-India’ products & solutions; Increase Digitization-Enable and encourage digitization of impacted areas e.g. Local stores, supply chain cogs; Funding Fuels-Alternate source of funding like bank loans, NBFCs, new investors; Nurture Partnerships-Build/Enhance partnerships with tech solution providers, customers and other stakeholders.
40% Start-ups consider Healthcare as a big vertical opportunity. 50 % Start-ups consider Artificial Intelligence as a big technology opportunity. 20% Start-ups consider Edtech and Fintechas other key verticals. 22% Start-ups consider IoT and Blockchain as a big technology opportunity. 2/3rd start-ups believe that COVID impact will last up-to 12 months. Mature start-ups expect COVID effect to last upto 8 months. Mid and low revenue start-ups foresee COVID effect to last beyond 8 months.