Nasscom: Survival at stake for 70 pc of start-ups

Industry body Nasscom raised concerned over the conditions of start-ups in the India. The industry body said the start-ups are facing serious revenue and cash flow issues and 70 per cent have cash reserves that will last less than three months.

In an e-survey done by Nasscom titled ‘Reviving the Indian start-up engine during Covid-19’, showed about 90 per cent of start-ups in India saw fall in revenues.  Over 30-40 per cent have halted their businesses temporarily.

The situation is worse for mid-stage start-ups, as they have been affected severely due to the lockdown in India.

Of over 250 start-ups that took part in the survey, as 62 per cent are suffering revenue decline of over 40 per cent while over 30 per cent have suffered revenue losses up to 80 per cent.

The survey also stated that 60 per cent of B2C start-ups face closure of businesses if things will not get normal.

Nasscom said the entire startup ecosystem has been affected. Many plans that start-ups had have been delayed by almost two months including technology upgradation, product development, business operations, funding roadmap and growth and business development.

Various start-ups also say that the uncertain situation has become a nightmare for them as nearly 69 per cent of surveyed B2B companies cited client payment delays. Meanwhile, B2C start-ups are facing a severe manpower crunch in the lockdown.

Nasscom’s e-survey shows that the start-up sector needs some sort of funding from govt to mitigate the economic crisis.

With more than two-thirds of the survey start-ups expecting the impact of the start-up to last up to 12 months, over 70 per cent are seeking policies that support easing regulations and opening up of government procurement.

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