Indian startup space sees a slowdown during COVID19 lockdown

Coronavirus has hit the world financially, emotionally, and physically. We have seen the physical aspect of COVID- 19, but coronavirus has also impacted our startup stories industry. The article is about why startup stories have seen slowdown due to coronavirus.

How were the startup stories doing before coronavirus hit India?

Indian startup stories were doing really well before coronavirus hir India, and some startup stories were becoming popular worldwide. The startup stories have seen massive growth in the year 2019.

Presently, India has seen around 80,000 startup stories, and they were successful in raising approximately 10 billion dollars in 2019. These figures of Indian startup stories were unbelievable as Indian GDP growth hit was not doing well in 2019.

 

Predictions about Indian startup stories after coronavirus hit India.

Coronavirus has hit the world, and there have many casualties even in developed nations such as the US and UK. There have been a lot of predictions that COVID- 19 will also affect the Indian startup stories.

  • Late financing rounds by the investors may have a negative impact on startup stories during coronavirus.
  • Murali T, the partner, and innovation leader, PWC, has said that coronavirus will affect the Indian startup stories as large segments of society will see a drop in demand for some goods.
  • The work from home will also impact the productivity of the employees of the startup stories.
  • The widespread travel restrictions will also affect startup stories, as many founders won’t be able to plan trips for funding.

 

Late financing will affect the growth of startup stories.

Indian startup stories have seen that finance rounds have begun to slow down amid coronavirus. Many startup stories were in talks with Asian investors, have told the startup stories to stop the financing rounds during coronavirus.

Indian startup stories will see a hard time for the next 6- 8 weeks, with demand, will get softer in all the sectors. The Indian startup stories who have launce fundraising efforts this month will face may challenges.

 

China’s presence in Indian startup stories

China has always been the favorite investor among the startup stories in India. The Chinese have been a game-changer since the last 4-5 years in the Indian startup stories.

  • Chinese companies invested two billion dollars in 2018 in the Indian startup stories.
  • This figure rose to 3.9 billion dollars in 2019, with Chinese investors becoming the most prominent Asian investors of Indian startup stories.
  • Many companies, such as B2B, were heavenly dependent on China for their supply chain, will also see a decrease in transactions.

Note: With China being one of the major countries hit by coronavirus, Indian startup stories have seen growth and late financing with investors putting hold all the fundraising talks.

 

Conclusion

Since no meeting is happening and investors have put a temporary hold on fundraising talks, this will affect the ecosystem of startup stories. The crash in the stock market will also impact VC funding space.

E and Y’s Pahwa said supply chain would get more severe amid lockdown, and it will lead to recession, leading growth deals becoming difficult. Sequoia Capital has sent out a warning to companies that coronavirus will lead to the global economic slowdown, and it will take several quarters to recover.

Srishti Garg
Srishti Garg
Srishti is currently studying in University of Delhi and developed love for reading since childhood. A lot of introspection has made her realise that she is passionate about writing.

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