Around the world 192 countries are suffering from the Coronavirus pandemic. Most of all affected countries are in lockdown from weeks and months. As per the Government guidelines, Business is operating through work from home.
This pandemic affected the economy. All types of business, Be it start-ups or it may establish ones, are facing challenges in this pandemic. The biggest businessman Bill Gates said that the virus could lead to global economic depression.
In a memo to founders and CEOs, Sequoia equated coronavirus with the “black swan of 2020”, stating it could have far-reaching implications.
Its guideline to startups was simple: question every assumption, be it the business, fundraising, sales forecast, cash runaway, headcount, marketing, capital funding, the list goes on.
Surely, the world of investments is coping with COVID-19 uncertainty. The world of investment is dealing with coronavirus uncertainty. It may seem like early days, but anxiety is palpable among venture capitalists, entrepreneurs, and start-ups over what the future may bring, post-coronavirus.
The start-up ecosystem in India seems to have moved into the zone of “status quo” as far as investments are concerned. Pranjal Kumar the CFO of Bertelsmann India Investments said, “It (COVID-19) started to hit home in mid-February. So, there is uncertainty and no one knows what is going to be the result of that.
“As a start-up, we would be in a big problem when there is no cash flow because of lockdown, I don’t know about how I am going to pay the salary to all my employees” Said Moolayil.
They had a firm with 115 on its roll. Sreejith Moolayil is co-founder of True Elements; the Pune based consumer-focused startup which offers healthy food.
The example of TheWowBox is additionally somewhat equivalent though the start-up faced a rather different challenge. The Mumbai-based company offers a discovery platform for brand spanking new consumer products.
As a part of its promotion initiatives, the firm distributes newly launched products of various companies and also promotes entertainment events.
Consistent with its founder and chief military officer (CEO) Nikunj Bubna, these need to be completely stopped since consumers are now that specialize in buying only essential items.
“Our business has straight gone right down to zero. We kept all products in our warehouse which are worth lakhs are on the verge of expiry,” said Bubna. “Our fundraising process also got impacted.”
With a few emerging opportunities, India’s startups need immediate government intervention to be able to survive, the report said. “To make sure that the Indian start-up movement and its growth trajectory is not crashed, coordinated support from key stakeholders is the need of the hour,”
Debjani Ghosh, Nasscom President said. “Some of our recommendations to the Government include access to working capital, easing compliance, and funding support.”
Additionally, compatible with a survey by community platform, early-stage start-ups, funding dependent start-ups, and lots of small businesses that fighting for survival.
It revealed that about 71 percent of start-ups and little businesses face issues like lower demand for products and services.
This can potentially end in salary cuts and a discount on expenses towards marketing, advertising, and infrastructure. Many companies have asked their employees to figure from home and many have temporarily suspended operations.
Sachin Taparia, The founder and chairman of LocalCircles said that the survey exactly captures what start-ups are currently faced with pandemic and needs to make recommendations to the government on relief measures that are needed for the start-ups.
According to experts, start-ups have begun conserving cash regardless of their size. Any quite an investment that was within the pipeline, including hiring and new projects, are curtailed. “Most vulnerable are the start-ups which were running out of money and haven’t been ready to raise funds. Because the scenario has bogged down, they might be under risk,” said Anup Jain, managing partner at Orios Venture Partners.
Nine out of ten startups have seen a decline in their revenue. The survey was taken by over 250 startups ranging over diverse sectors like travel, healthcare, edutech, fintech, retail & others. Covid-19 is that the single largest challenge India’s nascent startups have faced with 92 percent of these surveyed reporting a decline in revenue.
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