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Praxis documents travails of Indian startups due to Covid-19
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April 6 2020: Management consulting and business research services firm Praxis has aggregated insights from over 50 Indian startup founders, about the impact of the Covid-19 outbreak.
The Startup Sentiment Survey Report has some broader benchmarks/learnings, as well, for the startup community.
The Key takeaways
- In the last 2 weeks, ~50% of startup CEOs faced operational challenges, drop in productivity and delay in payments
- Over the next 3 months (Apr Jun 2020), approximately 84% of CEOs believe the fundraising environment will decline and 74% of CEOs believe growth will decline
- The next 2 year outlook is positive for profitability (69% believe it will be better than FY20) and moderate for growth and fundraising
- Over 50% Indian startup CEOs believe new business opportunities will start to appear after the initial 3 months (June 2020 onwards)
- Some 21% of startups have cash reserves of less than 6 months, 37% with 6-12 months, 21% with 12-24 months and 21% with more than 24 months of cash. While 52% of startups think they would require cash reserves of more than 12 months for business continuity
- About 50% of organizations have already cut marketing and discretionary costs, some 68% are not planning about any kind of downsizing
- Top 3 focus areas for Indian startups apart from conserving cash: process standardization, expansion/growth planning, fundraising
- Top recommendations by founders - Focus on managing/conserving cash by cutting costs but no layoffs
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