The Coronavirus pandemic took over the world like a wildfire. With the continuously rising numbers, there are currently over 2.1 million COVID-19 positive cases, with 147k registered deaths. India alone has over 13.3 k confirmed Coronavirus cases and a death toll of over 437.
Multiple startups from the Indian Startup Ecosystem have suffered major losses during the global pandemic, which is why they have been forced to rely on cost-cutting methods like laying off employees.
According to a report by Business Insider (1), Morgan Stanley’s CEO said that the global recession endured due to Coronavirus could last through 2021, leading to a global economic slowdown, which might be worse than the previous major setbacks occurred in the 2008 recession.
Decreased Indian Startup Fundings
The year 2020 was predicted to be an astounding year for the Indian startup community in terms of funding. According to data from Tracxn, India raised an impressive $3 billion in freshly accumulated funding during the month of February, which three times more funding than a year ago. However, since things started whirling around the COVID-19 pandemic, startup funding India is predicted to hit a massive blow.
The venture capital firms that were initially focussed on expanding their portfolio are now looking forward to strictly protecting the existing portfolio companies during this crisis. The lockdown has made it challenging to set up meetings with venture capital firms and other investors that have not fully instituted the processes to make final decisions without meeting the individual face-to-face. China is the biggest compromised goldmine for Indian startups.
Startups Seek Help From Government
According to Business Today (2), there are many startups that are seeking financial support from the government to help with salaries, loans, etc. The report states that the Indian startup community with some of the best business in India, businessmen, investors, and other industry associates have contacted the finance minister and prime mister seeking urgent intervention to tide over the corona outbreak.
In the letter addressed to Prime Minister Modi, the community wrote that the COVID-19 crisis has threatened to destroy all of the progress & future potential of the Indian startup ecosystem in a few short months. Additionally, the letter also stated that our country’s startup companies were inherently young, less resilient, & most vulnerable and were likely to face devastation during this extraordinary economic downturn.
Alternate Working Methods
Startups, in an effort to continue functioning as normally as possible, have introduced remote working as a replacement for the usual work routine for its employees. There are even multiple job portals India that are providing individuals with work from home opportunities, helping in their career advancement.
However, there still are industries that have failed to function by working from home as their work cannot solely rely upon the internet. Many countries like the UK, the US and Canda have already announced massive economic bailout plans to protect their business ventures, economies and job losses, and with this, the Indian startups are scared that they might not be able to survive the recession if not provided with speedy relief measures by the government.