Confidence level among Indian tech startups on the rise, says Nasscom survey

Technology startups in India have started to bounce back from the impact of COVID-19 and more than 50 percent of them are confident of reaching revenues of pre-COVID-19 level, according to a survey.

Nasscom, in its latest six month survey starting from June titled, “Indian startups – on the road to recovery” said 43 percent of the tech startups have cash available for more than six months as compared to just 8 percent of them when the earlier study was done in the month of May.

COVID-19 has had deep impact on the Indian startup ecosystem, especially on the early-stage companies which struggled with issues like generating revenue, lowering cash burn or retaining people.

The Nasscom survey said, “Indian tech startups are now witnessing a gradual road to recovery.”

Among the key changes which occurred over the last six months include: four startups became unicorns, 30 percent of B2B startups recorded rise in revenues, more startups lifted the freeze on hiring, and companies in the segments of edtech, fintech, and healthtech saw faster recovery.

The boost to technology startups came from the broad trends like increased digital adoption, shift to online and also the various government initiatives such as the Aatmanirbhar Bharat campaign.

The Nasscom survey said, “Almost 25 percent of the surveyed startups have been able to raise funds or find prospective investors as compared to 7 percent in the earlier survey. “

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Nasscom President Debjani Ghosh said, “The Indian startup ecosystem has set a global benchmark and remained resilient during this disruptive year. Setting an example for many other industries across the globe to follow and learn from how Indian startups converted challenges into opportunities.”

However, the survey said to ensure this road to recovery for the technology startups, there are five key imperatives for startups to sustain growth momentum: optimise operational metrics; expand or pivot towards growing or upcoming verticals; ‘Vocal for local’ products and solutions and creating a larger social and economic impact; fostering trust-based partnerships with ecosystem players and customers; and lastly, enable and encourage digitisation of impacted areas.