5 Times Growth in Tech Start-ups with Over 6 Months Runway: NASSCOM's Report

- BY Jaspreet Kaur
Feature Writer, BusinessEx
- |
- Nov 26,2020
- |
11 Mins Read
In NASSCOM's latest report, the tech startups ecosystem has been studied closely. With the onset of pandemic, various things have changed in the business landscape. As per Startup-Pulse Survey 1 (SPS-1), which was conducted between April and May, stated that almost 2/3rd tech start-ups have a runway of less than 3 months. Tech start-ups focused on identifying survival strategies and disruption across the value chain. During this period, companies started identifying emerging opportunities, immediate survival measures and support expected from all stakeholders.
A different picture emerged in Start-up Pulse Survey 2 (SPS-2); tech start-ups in the country were on a gradual road to recovery. A five times growth in tech start-ups with more than six months runway. Short term priorities and long term strategies adopted by tech start-ups to tackle COVID-19. Companies implemented diversification strategies and increased focus on deeptech, AI and emerging verticals. They cautiously optimised their outlook. According to the survey, less than 50 per cent startups are anticipated revenues to pick up within the next 6 months.
Behaviour of startups changed to cope with pressures of pandemic. Here are some findings relating to business recovery, strategizing and sector outlook
Business Recovery
Tech start-ups faced losses down by three times since SPS-1. A 2.5 times growth in tech start-ups have been seen in 3 months along with the runway as compared to SPS-1. More than 20 per cent tech start-ups have lifted the hiring freeze. Startups in edtech, fintech and healthtech sectors have registered faster recovery.
Strategic Interventions
Product innovation and funding availability were persisting challenges for startups. Strategies that were adopted by start-ups to tackle COVID-19 were:
Short Term: Cost optimization, product diversification
Long Term: Focus on Deeptech, expanding to new verticals
In addition, product diversification has become the new normal for startups
Sector Outlook
Over 50 per cent start-ups expect revenues to reach pre-COVID levels within 6 months. Ecosystem stakeholders taking multiple initiatives for start-ups such as grants and incubation programs etc.
Key imperatives that have been taken by the startups are focused on operational excellence, portfolio diversification, collaborative approach, encouraging digital first models and making India Atma Nirbhar.
During the initial phase of pandemic, 92 per cent startups suffered while 4 per cent witnessed business growth along with 4 per cent, which were not impacted at all. In comparison, 30 per cent startups have recovered and seen positive growth during October and September.In the cited time period, 51 per cent companies were still harshly impacted.
NASSCOM’s survey stated that nearly 27 per cent of seed stage start-ups and 27 per cent of early stage start-ups have been recovering faster. Approximately 25 per cent of start-ups each in edtech, fintech, healthtech and retail tech have recorded recovery. While, roughly 30 per cent B2B startups have recorded rise in revenues. Further, 4 startups have become unicorns during the pandemic and 22 acquisitions have happened from April to August 2020, of which 19 were in the B2C space.
These figures show that tech startups still have a long runway and would recover faster than other companies. A speedy recovery is still desired for the Indian startup community.
More from Jaspreet Kaur
5 C’s Entrepreneur must be aware...
Getting a Loan is a difficult task so one must be prepare...
July 11, 20173 Min Read
What incubator provides startup...
Startups need incubators for their overall development...
January 10, 20183 Min Read
When Is Debt Better Than Investment?
An entrepreneur must consider lending as an option...
January 17, 20183 Min Read
8 Food Business Ideas Pick Up Steam...
Seeking business opportunity in the food industry then...
January 18, 20183 Min Read
How to maintain a good business...
A good relation between mentor and entrepreneur builds...
January 20, 20183 Min Read
How online networking helps small...
A one stop solution for all business related problem...
January 22, 20183 Min Read
Why invest in the leisure and entertainment...
Investing in the leisure and entertainment industry...
January 23, 20183 Min Read
Why you should invest in a startup?
Investing in a startup is the fastest way to get a...
January 24, 20183 Min Read
When is the right time to exit...
Starting a business is not a child's play so it is...
January 29, 20183 Min Read
6 mistakes to avoid after raising...
Entrepreneur makes mistakes after raising funding which...
January 30, 20183 Min Read
What Startups and SMEs can expect...
Let's see what experts have to say on this year budget...
January 31, 20183 Min Read
Union Budget 2018: Highlights for...
Union Budget 2018 has revealed some policies that impact...
February 01, 20183 Min Read
Recommended for you
- September 30, 2021
- September 17, 2021
- September 10, 2021
Latest News & Articles
- July 11, 2017
- January 10, 2018
- January 17, 2018