The finding was part of a survey jointly conducted by FICCI and Indian Angel Network.
The ongoing covid-19 crisis has deeply impacted the Indian startup ecosystem with close to 12% startups stating shutdowns, according to a survey jointly conducted by Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Angel Network (IAN).
The nationwide survey on the ‘Impact of covid-19 on Indian start-ups’, conducted across 250 startups, said 33% of them said that investors have put investment decision on hold, with only 22% startups stating that they have the necessary cash reserves left to meet the fixed cost expenses over the next 3-6 months.
Another 10% stated that deals have been called off, with only 8% of startups receiving the funds as per the agreements signed during pre-covid times.
With increasing uncertainty and lack of funding, the pandemic has had an unprecedented impact on startups, leaving many of them struggling to keep the operations going.
“The startup sector is stressed for survival at the moment. The investment sentiment is also subdued and is expected to remain so in the coming months. Lack of working capital and cash flows may lead to major layoffs over the next 3-6 months by startups. The survey indicates that the Indian startups need an enabling ecosystem and flow of funds to continue operations,” said Dilip Chenoy, secretary general of FICCI.
The FICCI-IAN survey now highlights that 68% of the start-ups are majorly cutting down their operational and administrative expenses, and another 30% of startups are expected to lay off employees if the lockdown was extended too long.
Source, Article on: livemint.com