The COVID-19 pandemic has severely impacted Indian startup space. According to a new survey conducted by India’s IT industry body, Nasscom, 9 out of 10 startups in the country are expecting lower revenues because of the outbreak. Travel and transport startups were reportedly the worst affected. However, fintech, supply-chain management (SCM) and logistics startups are also seeing a drop in revenues.
The survey further revealed that 30 to 40 percent of the startups had halted their operations either temporarily or permanently. Even among the ones that are operational, more than half are reportedly looking to invest in new business opportunities. Interestingly, the pandemic has negatively affected the businesses of companies both in rural and urban areas. As per the survey, nearly 63 percent of startups in metro cities are facing over 40 percent decline in revenue.
The survey was conducted with over 250 startups in India. According to Nasscom, these companies have diverse profiles. They include a large number of mid-age startups alongside mature and early-stage startups. According to Nasscom President, Debjani Ghosh, “Out of the blue, this flourishing growth saga has suddenly been hit by the COVID roadblock. There is no country, business or living being that has not been affected by the COVID pandemic”.
Thankfully, there still seems to be a silver lining to the prevailing doom and gloom in the economy. According to the report, 14 percent of edutech, fintech and healthtech startups are still expected to grow this year despite the setback. Business-to-business (B2B) startups are also expected to fare relatively better, with revenue reductions of ‘only’ up to 40 percent.