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After COVID Struggles of a Startup in India

Going through the countless memes during COVID lockdown, I could safely say that I’ve witnessed at least one “Black Swan” event in my life. As the COVID19 pandemic slowly unfurled its wings plunging us into excruciating grief, we nonetheless found our genes through the Gig Workers who became not only our food delivery friends but also the crucial economy’s frontrunners!

However, It’s not hard to see the economic devastation suffered by small Indian businesses. The stores were closed, the lights turned off with apology signs hanging from the windows. Small take-out tables and restaurant windows allow only the quickest exchanges on the sidewalk. The proof was literally in front of us.

It was a little harder to see the economic damage to startups and the country: tech-focused young companies working primarily in software and life sciences. Their offices were above street level and inside anonymous office buildings. But, as a new report from Startup Genome makes clear, many startups are still struggling just as much as other small businesses.

The Ugliest Effect of COVID on Startups:

According to the research, two-thirds of companies worldwide were running out of money within six months of the Pandemic. Within three months of the COVID Crisis, four out of ten startups believed that had occurred with them. The number of organizations categorizing themselves as being in the “red zone,” already defined by the survey, has increased by 40% since December.

Not Only Businesses But,

Employees broke a disproportionate amount of the negative effect, just as they do in other types of small firms. Three-quarters of startups say they’ve already had to lay off full-time employees. At the moment, the cuts do not appear to be substantial. Half of the organizations that have laid off employees have laid off less than 20% of their workforce. That’s a lot less than I’ve seen in other statistics regarding small businesses in general.

Numbers Don't Lie:

  • Nearly 20% of firms who had a term sheet before the outset of the crisis had the term sheet removed by the investor, and 53% saw the process lag substantially or encounter an unresponsive lead investor. Only 27% had the procedure proceed regularly or had the money secured.
  • Since the onset of the crisis, 74% of startups have had to lay off full-time staff. 39% of all startups had to lay off 20% or more of their workforce, and 26% had to lay off 60% or more of their employees.
  • Since the onset of the recession, 74% of startups have seen their sales fall. The most prevalent sort of income change is a little decrease. However, a significant number of enterprises were adversely affected: 16 % of startups saw their revenues drop by more than 80%.
  • The impact of the crisis on the industries that these businesses serve is one of the main reasons for revenue decreases. Three out of every four startups are in industries that have been adversely affected by COVID-19.
  • Every catastrophe brings about a new opportunity. According to Startup Genome statistics, over half of Fortune 500 businesses were founded during a recession, and over 50 unicorns were launched during the Great Recession alone. The COVID-19 problem is no different!

Yet, the struggle is not over. Many startups in India are still facing
many challenges to strengthen their roots in the market.

“Every challenge comes with an opportunity.”
Challenges are an inevitable element of the path to success. Everything is manageable with a plan, patience, and hard effort. If you are experiencing any of the above-mentioned challenges, please remain in touch with us. We will shortly provide the solutions.
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