In a world drowned in the COVID-19 virus, millions are trying to survive. Thousands have lost their jobs whilst everyone else is praying to sail through these unprecedented times safely. Apart from flourishing businesses, startups amid COVID19 are the worst hit.
Already taking baby steps, startups are facing a serious blockage, especially when it comes to funding. One of the biggest worries is their inability to pitch ideas to the world, even as there is a partial lifting of the lockdown. Additionally, the economy is facing a gruesome burden of its own to bring the order back in the country. This has put a halt on several startups that would have otherwise qualified for funding and loans.
Why are startups worried
According to an online study conducted by Nasscom, COVID-19 is the single largest challenge India’s nascent startups have faced. The online survey reported that these startups have reported a 92% decline in revenue. While 30-40% tech startups have temporarily halted their operations or are in the process of closing down, 70% tech startups have runway of less than 3 months left. The falling numbers indicate their inability to continue operations owing to the slump in revenue as well as downfall in potential funding opportunities.
Adding to the pain is the revised FDI policy of the Indian government. It is notable that the Indian Government recently made certain alterations in the existing FDI policy to curb the opportunistic takeovers of Indian companies. There has been a keen demand to go vocal for local. According to revised guidelines, any investor of a nation that shares land borders with India requires approval to make investments.
2020 is witnessing a major shift, a downfall for many sectors. Public markets are bleeding profusely and venture capital funds have become extra vigilant towards their planned spending. Deep-pocketed global investors are also taking a step back and have stalled some large deals. Ajay Deep Singh, founder and CEO of Chandigarhmetro.com feels that the impact of COVID-19 will last for at least 12 months. He sayd, “People are only looking for bare essentials. All they want to know is about COVID”. Chandigarh Metro is a one-of-a-kind online news & information portal for the residents of the tricity. It presents trendy news and information in an interesting way and drives tremendous traffic. However, the business is thriving hard to keep the readers coming back.
Green patches for edtech startups
There is a great potential for business-to-business as well as edtech, fintech and healthtech startups. There has been a paradigm shift with e-startups leveraging the current situation to their benefit. With the world turning digital, these start-ups are able to raise fund and use it to achieve their top-line objectives. BYJU’s, a popular e-learning app saw 6 million new students accessing free lessons on its platform in March. They also acquired WhiteHat Jr recently in a $300 million deal in the midst of the lockdown.
Indian startups during the lockdown
Other players in the edtech space also saw the green. Unacademy recorded 1.4 billion watch minutes, while Toppr witnessed 100% increase in free user engagement in the same month. Edtech startup Bada Business intends to train 10 million entrepreneurs over the next 6 months as part of its ‘India Revival Mission’. This plan caters to micro, small and medium enterprises.
Health tech startups are also using the current situation and resorting to the latest ITes solutions. They want to use this opportunity to meet the demands of the changing dynamics of the virus. TruFactor, a healthtech startup, recorded a 25% increase in TruFactor data since the outbreak. This especially comes from companies in consumer, retail, education and financial space.
The pandemic has also proven to be a boon for some. LiqHub launched its liquor delivery business amidst the pandemic. Founders of LiqHub, Aryan Solanki and Shashank Chandel state, “The pandemic has been a blessing in disguise for us. We have been pushing for a permit for liquor delivery for past four years, showing the advantage for society plus the revenue advantage for government.”
LiqHub is currently delivering alcohol in Kolkata and a few other cities in Odisha and is planning to extend its facility in Jharkhand, Delhi and Maharashtra.
If you have launched or sold a startup during the lockdown, send us an email on editorial@techthirsty.com. We would be happy to cover your thoughts!