Indian startups, which employ around 4,00,000 people across 9,300 technology firms, are walking a tightrope between staying the course, and pivoting their businesses to adapt to the new normal.
The Covid-19 pandemic has ravaged businesses across the world, changed consumer behaviour and put millions of people out of work. And India’s startup sector doesn’t seem to be coming out of this unscathed.
Nine out of 10 startups have registered a drop in revenues and a little over a third halted operations, according to a survey by industry body Nasscom.
Hanging by a thread
With nearly two months into lockdown, early and mid-stage firms, especially in the business-to-consumer space, are the worst hit. The survey, which received responses from over 250 startups across sectors, found:
60% of all B2C startups were facing closure.
92% reported a decline in revenues.
40% of startups have either temporarily halted operations or are in the process of shutting down.
70% have cash reserves to last less than 3 months.
54% said they were looking to pivot their businesses.
The only bright spots for the startup sector were seen in ed-tech with 14% businesses reporting an increase in revenue. Read more.
Flipkart slows Walmart’s growth
US retail giant Walmart said its international e-commerce business growth in the quarter ended April 30 was hit by limited operations at Flipkart, which dragged down some of the growth that was driven by strong demand for online sales in the UK, China, Canada and Mexico. This comes after its arch-rival Amazon said that India was its most impacted geography due to the pandemic, earlier this month.
Why it matters
Flipkart saw a massive drop in sales at the end of March and for all of April as it was restricted by the Indian government from shipping anything apart from food and groceries to consumers. Analysts tracking the space told ET that groceries and food made up a very small percentage of Flipkart’s business. Read more.
Livspace layoffs
Home design and renovation platform Livspace is laying off 450 people, or 15% of its workforce, as the Covid-19 pandemic and subsequent nationwide lockdown hit its experience centres and its last-mile operations.
Severance offered
Employees who are being let go will receive one month’s salary along with extra pay of one-four weeks for those who have spent more than three months at the startup, proportional to the duration of their service, the Bengaluru-based startup said. The company has also rolled out success-based variable pay across the board.
With this, Livspace joins a series of internet businesses—including Swiggy, Zomato, Oyo, Cure.fit, Udaan, BlackBuck, Treebo, Acko, Fab Hotels, Meesho, Shuttl, Capillary, Niki.ai, and Fareportal—that have retrenched workers, including temporary staff, in the past few months. Read more.
Online learning boom
More than 3 in 5 Indian professionals (63%) will increase their time spent on online learning, as a response to a cut-throat job market, according to professional network LinkedIn’s Workforce Confidence Index survey.
The survey, which covered 2,323 respondents, found that remote working, a shrinking job market, the need for upskilling and to stay mindful through these challenging times are some of the reasons for professionals spending extra time on online learning.
By the numbers
- 60% of Indian professionals want to gain more industry knowledge.
- 57% want to learn how they can advance in their careers.
- 45% want to better their communication capabilities through online learning.
- 43% want to learn better time management.
- 40% of Indians say they want to learn something unrelated to their line of work.
- 30% wish to improve their emotional well-being.
Read the story here.
Lendingkart bags Rs 319 crore
Digital lender Lendingkart Technologies said it has raised Rs 319 crore as part of its ongoing Series D round led by existing investors including Fullerton Financial Holdings, Bertelsmann India Investments, Sistema Asia Fund and IndiaQuotient.
The company said it will use the funding to expand its lending base and further reach out to underserved micro, small and medium enterprises, and strengthen its technological and analytics capabilities. The Ahmedabad-based startup has raised Rs 1,050 crore so far. Read more.
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