Covid-19 is affecting Start-ups: FICCI-IAN Survey

08 July 2020: A nationwide survey on the ‘Impact of COVID-19 on Indian Start-ups’ conducted by Federation of Indian Chambers of Commerce and Industry (FICCI), jointly with the Indian Angel Network (IAN), reveals that out of 250 start-ups, 70% stated that their businesses have impacted by Covid-19; 12% have shut operations and 60% are operating with disruptions.

The survey depicts that only 22% of the start-ups have cash reserves to meet the fixed cost expenses of their companies over the next 3-6 months. The findings show that 68% of the start-ups are majorly cutting down their operational and administrative expenses. Close to 30% of the companies stated that they will lay off employees if the lockdown was extended too long; 43% of the start-ups have already started salary cuts in the range of 20-40% over the period of April-June 2020.

On the investment front, 33% start-ups said that the investors have put the investment decision on hold and 10% stated that the deals have been called off. Only 8% start-ups received the funds as per the deals signed pre-COVID.

Dilip Chenoy, Secretary General, FICCI said, “The start-up sector is stressed for survival at the moment. The investment sentiment is also subdued and is expected to remain so in the coming months. Lack of working capital and cash flows may lead to major layoffs over the next 3-6 months by start-ups.”