The ongoing covid-19 crisis has deeply impacted the Indian startup ecosystem with close to 12% startups stating shutdowns, according to a survey jointly conducted by Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Angel Network (IAN).

The nationwide survey on the ‘Impact of covid-19 on Indian start-ups’, conducted across 250 startups, said 33% of them said that investors have put investment decision on hold, with only 22% startups stating that they have the necessary cash reserves left to meet the fixed cost expenses over the next 3-6 months.

Another 10% stated that deals have been called off, with only 8% of startups receiving the funds as per the agreements signed during pre-covid times.

With increasing uncertainty and lack of funding, the pandemic has had an unprecedented impact on startups, leaving many of them struggling to keep the operations going.


“The startup sector is stressed for survival at the moment. The investment sentiment is also subdued and is expected to remain so in the coming months. Lack of working capital and cash flows may lead to major layoffs over the next 3-6 months by startups. The survey indicates that the Indian startups need an enabling ecosystem and flow of funds to continue operations," said Dilip Chenoy, secretary general of FICCI.

The reduced funding has led several startups to put a hold on their business development, manufacturing activities and has resulted in loss of projected orders, the report said.

The sector through this survey highlights the need of an urgent relief package from the government for startups including - tax relief and swifter tax refunds, and immediate fiscal support measures including grants, soft loans and payroll grants - to soften the blow of the impact.