25% of startups face serious challenges if coronavirus remains for long, says expert
A quarter of Indian startups could face serious challenges if the coronavirus crisis persists for an extended period, information technology industry veteran Senapathy (Kris) Gopalakrishnan said. "About 25 per cent of the startups have less than six months of runway," Gopalakrishnan told news agency PTI. "They will be in serious trouble if the recovery does not happen in six months, it does not look like (happening within that period)," he added.
"I would say 25 per cent of the startups will face serious challenges. If they are able to get additional investment, they will survive otherwise they will fail. Not all of them, some of them will fail," said the former President of the Confederation of Indian Industry (CII). About the future of remaining 75 per cent of the startups, he said that the sector may see more failures if the crisis persists for longer time.
Meanwhile, a survey by LocalCircles released in the last week of April had said that 47 per cent of Indian startups and small and medium enterprises (SMEs) have less than 1 month of cash left amid the ongoing coronavirus lockdown.
The report had also said that the startups and small businesses had submitted a slew of demands to the government including reimbursement of 50 per cent of startup employee salaries for one month or a one-time Rs 20 lakh grant for government registered startups, expediting PSU, government and large corporate payments to startups, processing tax deducted at source (TDS) refunds for FY 20 within 15 days and enabling corporate social responsibility (CSR) funds to be deployed into startups.