90% Tech Startups Facing Decline Due To Covid-19 Outbreak, 30-40% Firms About To Close Down: Report

Nasscom on Tuesday released the findings of its month-long survey where it studied how the Covid-19 crisis has delivered a major blow to startups in India.

(Representative Image/ Getty)

New Delhi: A Nasscom Survey on Tuesday has revealed how coronavirus crisis and the nationwide lockdown have adversely affected startups in India. Due to the pandemic, about 90 percent of tech startups in India are facing a decline in revenues, while operations of 30-40 percent such companies have either come to a standstill or are in the process of closing down. The findings of the 'Start-up Pulse Survey' revealed that approximately 34 percent of start-ups are suffering an 80% decline in revenues. The survey further added that the companies in the business-to-customer segment have been affected poorly -  about 60 percent of B2C startups are witnessing a business closure. In April, Nasscom conducted a month-long e-survey which included more than 250 startups. It aimed to report the impact of Covid-19 on start-ups in India. Parameters like growth stages, revenues, employees' strength, revenue, verticals, etc. were studied and analysed. According to the findings, in travel and transport startups, about 70 percent of companies are suffering a 40 percent decline. However, 14 percent of ed-tech, fintech, and health-related tech startups are expected to grow in terms of revenue amid the Covid-19 crisis. "However it is not all doom and gloom; more than half of the start-ups are looking to pivot to new business opportunities, diversify into growth verticals like healthcare, and enhancing focus on emerging tech like Artificial Intelligence, Internet of Things (IoT), Cloud," said Debjani Ghosh, President, Nasscom. Integrated central-state initiatives are needed to support "Made in India" start-up products and solutions, the report emphasized. "To ensure that the Indian start-up movement and its growth trajectory is not derailed, coordinated support from key stakeholders is the need of the hour. Some of our key recommendations to the government include access to working capital, easing compliances and fiscal policy and funding support," she said. India continues to be the third-largest tech startup platform in the world, with more than 9,300 tech start-ups in the country. (With Agency Inputs) WATCH: Masks not mandatory in China's Beijing now | Ground Report