MSMEs TAKING HIT

Startups strive to stay afloat

Resort to layoffs, pay cut to reduce expenses

Startups strive to stay afloat

Vijay C Roy

Tribune News Service

Chandigarh, May 22

Grim Scenario

  • As per Nasscom report, around 40% of India-tech startups are expected to shut down because of the Covid pandemic and North region is no exception
  • The report further said another 70% would face a serious financial crunch
  • According to the industry, young startups need guidance and mentoring in these times so that they can build their business in the right way and have access to easy finance at low rate of interest

Startups in the region are resorting to all options — layoffs, pay cuts, reduction in marketing spend and focus on sustainability — to stay afloat amid the Covid pandemic. The firms, especially in travel and retail sector, are the worst hit with uncertainty looming large.

According to a Nasscom report, around 40% of India-tech startups are expected to shut down because of the Covid pandemic and North region is no exception. The report further said another 70% would face a serious financial crunch.

The northern region comprising Haryana, Chandigarh, Punjab and Himachal Pradesh has around 1,000 startups registered with Startup India. Out of this, 700 are in Haryana and mainly concentrated in Gurugram.

According to the industry, the startups are facing delayed payments, shortage of funding and disruption in business operations amid the pandemic. Also, some of them are witnessing challenges in expanding their operations. Since a majority of them are in the MSME category, they are finding it difficult to sustain.

According to Ratish Pandey, Business Coach at Ethique Advisory, the startups across the country are facing challenges to sustain themselves. Sarvjeet Singh Virk, founder, Finvasia, said the disruption caused by the Covid has led to startups realigning their business models and focus on sustainability.

According to the industry, young startups need guidance and mentoring in these challenging times so that they can build their business in the right way and have access to easy finance at low rate of interest.

Extending a helping hand to early-stage startups, particularly in these times, Chandigarh Angels Network, in partnership with “Startup Punjab” has launched ‘iCAN Accelerator Programme’.

It’s a six-week virtual startup acceleration programme designed to handhold them into the next phase of their individual journey through dedicated sessions and mentorship. It has received a number of applications from over 17 states and UTs. Over 30% applications are from Punjab.

Talking about the acceleration programme, Rajat Aggarwal, State Startup Nodal Officer, Punjab, and CEO, Invest Punjab, said, “The programme is free for the startups. We believe such platforms are very useful for upcoming entrepreneurs who want to take their startups to the next level.”

The industry is of the view that in these times, the emerging sectors are Edtech, health and wellness and cyber security.

The startups have sought the Central government’s intervention to tide over the crisis. They have also demanded startup-specific government tenders and waiver of taxes for their survival.

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