Severe pandemic, Covid-19 impact has been seen on businesses, as many startups such as Oyo, Swiggy, Meesho, VOGO, and Udaan have layoff their staff. With the impact of lockdown on business and revenues, many small startups have stated that the capital in the bank has started to dry up.
The recent report by social media and community platform LocalCircles, 47% of startups and small and medium businesses (SMEs) said that they have no capital left to operate. The survey was done in the last week of March by the social community, they received more than 13,970 responses from SMEs and start ups located over 90 districts of India.
According to the LocalCircles survey, the start ups and SMEs have started are trying to contact the Government via its platform, also other industry associations are asking for help and guidance for tackling the situation.
Startups with no cash
Another 24% said that they only have cash for 1 to 3 months and 23% said they have a runway for 3 to 6 months. Only 6% of the startup said that they are covered for 6 months. The startups and SMEs had submitted various demands to the Government via LocalCircles; like they want government should help them in this current crisis.
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These include the repayment of 50% of salaries of startup employees for one or more them one time or 20 lakh grant for the setups which are registered under Government. Also want the Government and large corporate payments to startups, expediting PSU, dispensation TDS refunds for FY 2019-20 within 15 days, and allowing CSR funds to be organized into startup.
LocalCircles also claim that 61% of start ups are looking at scaling down while 20% were planning to sell their business or a complete shutdown. Only 13% are confirmed that they are looking at growth. Many entrepreneurs and venture capitalists stated that the next 6 month will be very critical for Indian startups and many employees will face layoffs.
Most of the startups are looking for newer strategies to keep them afloat, while fintech are planning to start up with kiranas, food delivery players like Zomato and Swiggy have turned toward the grocery to cope up the loss