According to the information technology industry expert, Senapathy (Kris) Gopalakrishnan, one-fourth of India’s startups would be in trouble if adverse consequences of the COVID-19 pandemic stays for long.
“About 25 per cent of the startups have less than six months of runway,” the co-founder of IT major Infosys Ltd, told. “They will be in serious trouble if the recovery does not happen in six months, it does not look like (happening within that period).”
As per the former President of the Confederation of Indian Industry, about 25 per cent of the new startups will face serious challenges and if they can get additional investment then only they will survive otherwise some of them will fail.
While the remaining 75 per cent of Indian startups can face more failures if the coronavirus-triggered crisis stays for long.
The Chairman of the early-stage startup accelerator and venture fund, 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.”
However, the former CEO and Managing Director of Infosys Ltd said, the outlook for startups depends on the business segment they provide to the people.
“For example, e-commerce is starting to operate, some of the food delivery starting to happen. In the area of travel, mobility, for example, passengers are not taking a shared ride or not using a taxi. The same vehicle can be used to deliver packages, food, and grocery. People will have to pivot,” Gopalakrishnan added.
Ankur Pahwa, Partner and National Leader E-Commerce and Consumer Internet, said start-ups will especially hope to quickly get back to startups normal with more stringent hygiene measures in place and with some of the guidelines provide a tailwind to them.
Moreover, demand for the work-from-home category will increase considering this as a new normal, Pahwa added.
“Supply chain will continue to be a challenge albeit with reduced pressures considering relaxation, with start-ups keeping a keen eye on maintaining the balance between supply and demand,” Pahwa said.