More than half of the startups in the country are looking to pivot their businesses as they face unprecedented challenges triggered by the coronavirus pandemic and a nationwide lockdown, industry body Nasscom said.
Nasscom said a survey of startups it conducted found that 54% of the ventures are looking for new business opportunities to tide over the crisis.
India imposed a nationwide lockdown on March 25 and has extended it thrice until May 31, crimping almost all economic and business activity. Startups, which rely more on investor capital rather than on bank borrowings or their own earnings, have been hit hard.
Even some of India’s biggest technology startups such as. Food delivery companies Zomato and Swiggy have announced layoffs and ventured into grocery supplies. Fitness chain CureFit has also let go many employees and shut many fitness centres. Hospitality firm Oyo and ride-hailing company Ola have been hurt, too.
The Nasscom survey found that healthcare and ed-tech were some growth verticals that startups were looking to diversify into.
Indeed, the pandemic has come as a shot in the arm of ed-tech and digital healthcare startups as people are compelled to take recourse to digital medium for their education and physical ailments as far as possible.
Last month, ed-tech firm Vedantu raised funding from Chinese venture capital firm Legend Capital and South Korea's KB Global. Online tutorial platform Lido Learning secured an additional $7.5 million in its extended Series B round of funding led by BAce Capital last month.
Other ed-tech startups which raised funding last month include Camp K12, Expertrons and Pedagogy.
Meanwhile, health-tech startups involved in digital doctor consultations and online pharmacy have gained traction. Health-tech startups such as DeepTek and Doceree raised seed funding this month.
The Nasscom report also said that 50% of the startups are enhancing focus on emerging technologies such as artificial intelligence, Internet of Things and cloud computing.
While many startups are looking to pivot to stay afloat, about 70% of the ventures have funds to last less than three months, Nasscom. This could lead to a lot of shutdowns and layoffs as investors use their dry powder largely to back only well-performing portfolio companies.
About 30-40% of the startups have already temporarily halted operations or are in the process of closing down while 90% of the startups are suffering revenue losses, Nasscom said.