The merciless virus from Wuhan has so far been able to accomplish most of the things it wanted, and its path of destruction is just increasing at an exponential rate. The fact that the entire global economy is going through the worst phase is not at all hidden, and when we talk about the Indian economy, its condition is no different and almost the entire country is facing lots of troubles. So, today, I have come up with this article, in which I have tried to showcase the impact that this virus is having on the technology startups of our country and also about their future. Therefore, without any further delay, let me start this discussion.
No doubt that a very historic relief package was announced by the Indian government, and it was nearly 10 % of India’s GDP, and a good portion of the same was reserved for the MSMEs, but still, when it comes to most of our tech startups, the road to recovery is not that simple and easy, rather it is a very long broken road whose length is also increasing each and every day, so you can imagine that it is indeed very difficult to reach the path of glory.
According to some of the research, almost every nine out of the ten startups are in the worst phase of their life, they are nearly wiped out of cash and other necessary resources which are needed for their survival.
As per some studies, you might be surprised to know that roughly forty-five per cent of such startups are about to collapse, while some of them have already collapsed, and many of them are temporarily closed, and the remaining ones are somehow going on with very little life left in them, their condition is just like a fish taken out of water.
Again, almost seventy per cent of such firms are left with less than ninety days of life left in them. NASSCOM has surveyed nearly two hundred and fifty such companies and found that their revenues are compressed by almost ninety per cent. So, you can imagine that a plethora of such companies are left to operate with only temperaments of the money, while all the other stuff of the companies remaining unchanged, it is really a very big issue and there is nothing which can be done at the very present time by us for the same.
We are also not alien to the fact that India is an emerging hub of technology startups and is currently the third biggest economy when it comes to such companies. According to some reports, there are around 8900 to 9300 tech startups in India alone, and also two to three such startups are born every day in India (before Covid-19 obviously). As of now, you might have understood the huge number of firms that are suffering and are prone to never an animal fading danger that lies in the very near future. But, we should also keep in mind that in this very time, these startups are not the only entities that are concerned, but a lot of employees working in them are also.
Again, as per the reports of NASSCOM, around sixty thousand people are the direct employees and roughly two lakh people are the in-direct employees in all these startups, and we have already witnessed mass unemployment that has been and is taking place in India. Over ten crore people are left unemployed and this process is increasing at a rapid rate. And when it comes to our tech startups, the situation is no different, a lot of employees are fired, while those firms that are temporarily halted by theft are also no longer paying their employees, nor are they in the condition to do the same.
To our surprise, not only startups, but many big players have also done the same, like – Wipro, Uber, Ola, and many more have either opted various cost-cutting strategies or they have fired some of their employees. Then you can predict the future of the employees of the startups, and ironically, those people who are working in these startups get paid less compared to the big firms and also they have a big or small family to look after and support with their hard-earned little money. It is really very difficult to imagine how they are going through this tough time.
The only question of the moment is that is there any way for those startups to come out of this danger?
Well, there is no fixed answer to this very question, but yes, there are a lot of suggestions and opinions regarding the same, and the only thing that these startups can do as of now is carried out various experiments, as they are somewhat in the position of no risk and no gain.
According to a recent survey, it was reported that a big portion of these startups was willing to switch their business into the healthcare sector, either for a temporary basis or for a permanent basis to save their brand from dying an unnatural death. As all of us know that healthcare is the sector that has seen the peak demand during this lockdown period, from online doctor consultations and online orders for medicines, and so on, all these have emerged as the apex predators.
And I personally feel that this is perhaps one of the best alternatives that can be adopted by these startups to safeguard themselves and their employees as well. The rapid increase in the demand for the healthcare sector has also led to delay in its activities, so this transformation will serve dual purposes, first of all, it will save all these firms and its employees, and secondly, it will also balance the delay experienced by all of us due to shortage of healthcare sector startups. like the fact that almost every time we order online, some of the medicines are out of stock, while the others reach us later than expected, so it would be a perfect chance to correct it.
Thus, to conclude I can say that most of the technology startups should utilise every penny that they receive from the centre in the best possible way, and come out triumphant in this situation, as this very situation is perhaps one of the worst things that have ever happened.