How is COVID-19 affecting the startup ecosystem in India? What measures can we take to overcome it?

The ongoing coronavirus outbreak is significantly affecting the startup ecosystem in India. It has been observed that most of the startups are now trying to deal with the condition by adopting work from home methods as much as possible. Besides, they are also trying to finding out different methods to conduct sales as well as client meetings. But it is still unclear about how startup business strategy would deal with the future circumstances if the condition worsens. 

A recently conducted study by All India Manufacturer’s Organization reveals that a greater number of livelihoods will be affected than the lives due to the coronavirus outbreak. The ground reports say if the current situation continues for more than one month, the small businesses or MSMEs in India will vanish. 

Small businesses and other MSMEs are considering the backbone of the Indian economy and have offered employment to 114million+ people. Besides, MSMEs are recorded to contribute around 30 percent of the country’s GDP. 

One of the major factors the propel the startup business to grow is Startup Fund Raising. The recent outbreak has affected this badly. The reason is most of the angel investors and Venture Capitalists are now unable to visit the country for meetings. This is something that can’t be done over telephone or video chat. On the other hand, the current situation has forced them to think twice before making an investment in startup companies. 

Furthermore, weak balance sheets have created obstacles in obtaining finance from NBFCS and other banks. This further resulted in the pilling of stock, which is causing losses. Moreover, there is now limited accessibility to China’s raw material. So, all these have greatly disrupted India’s startup ecosystem.

How to overcome the condition?

1. The startup, to survive the condition, can apply for different types of small business administration loans. There are different types of disaster loans that are applicable in the states where emergency status has been declared. 
2. This the time where every startup should try its best to minimize the cash crunch. You should start conserving cash as much as possible by lowering your expenditure level. For example, drop your expansion plan for now. 
3. Some experts have predicted that this can be the right time for a startup to approach Indian investors. So, try to locate Indian VCs Fund now. 

For more funding options and to know how to keep your startup safe during such time, you can take the help of SINBEX’s experts. Get in touch with them now.

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