25% startups to end soon, if COVID-19 lasts long: Gopalkrishnan
By MYBRANDBOOK
IT veteran Kris Gopalkrishnan, the co-founder of Infosys feels, if pandemic continues, startups cannot survive for long.
"I would say 25 per cent of the startups have less than six months runway, as they 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.
"They will be in serious trouble if the recovery does not happen in six months, it does not look like (happening within that period)”, said Gopalkrishnan.
On the prospects of the remaining 75% of Indian startups, he said there would be more failures if the coronavirus-triggered crisis lasts longer.
"There will be more failures, unless they get additional funding from existing investors or support from banks on working capital or support from the government for some form of debt or grants. We will see more companies get hurt as this prolongs," said the chairman of early stage startup accelerator and venture fund, Axilor Ventures.
The former CEO and Managing Director of Infosys, however, noted that the outlook for startups depends on the business segment they cater to.
According to Ankur Pahwa, Partner and National Leader E-Commerce and Consumer Internet, EY India, start-ups in the mobility space will especially hope to quickly get back to normal although with more stringent hygiene measures in place, adding, some of the guidelines provide tail wind to them.
B2C companies will have to wait for the demand to pick up under the discretionary spends, Pahwa said. Demand for work-from-home category spends will pick-up considering this new normal is here to stay, according to him.
The demand generated by tier II and III cities will be a key indicator of the consumer sentiment as many of the tier I cities continue to be under mixed zones.
"Supply chain will continue to be a challenge albeit with reduced pressures considering relaxation, with start-ups keeping a keen eye on maintaining balance between supply and demand," Pahwa said.
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