According to a recent Nasscom report, about 92% start-ups are facing a dip in revenues after the pandemic struck. While nearly 62% are seeing revenue decline of over 40%, the fall is as much as over 80% for about 34% start-ups.
As the pandemic transformed classrooms overnight, bringing them online, hiring in the ed-tech space has gone up. According to data sourced from staffing firm TeamLease Services, hiring in the segment has increased by 20% during January-May of the current calendar compared to the same period last year.
Health-tech is another area where the hiring sentiment is intact, thanks to the growing prevalence of telemedicine. Hiring in the sector saw a marginal decline of 1% during the January-May period compared to the same period last year. Amit Vadera, assistant vice-president at TeamLease, said the digital marketing and IT departments of companies are recruiting staff, as increasing reliance on remote-working entails product enhancement and sharpening online presence of brands. “Covid has amplified the use of technology of many organisations,” Vadera said.
Atit Danak, principal at Zinnov Consulting, said although the ed-tech sector is witnessing traction across products led by the K-12 segment, the spike is likely to get “tempered” as schools reopen and classes move offline. Cash flows in the ed-tech and health-tech spaces have been decent due to the uptick in demand but the overall hiring sentiment in the start-up space remains cautious as the funding cycle has been disrupted. “About 80%-85% of start-ups are of the view that they will take considerable time to raise funds. Their current cash flows demand that they be conservative,” Danak said.
According to a recent Nasscom report, about 92% start-ups are facing a dip in revenues after the pandemic struck. While nearly 62% are seeing revenue decline of over 40%, the fall is as much as over 80% for about 34% start-ups. About 70% said they have a runway of less than three months. Analysts at KPMG believe ed-tech and health-tech (related to fitness) sectors will see investments by venture capital firms going ahead even as the overall deal flow is expected to become very slow, particularly in Q2 2020.
Vadera said in the fintech space, some hiring is being done by cashback and discount coupon sites as they are trying to encash the fact that more people are placing online orders. With Covid likely to digitise the lending chain, there has been a 40% increase in the number of interviews in the fintech space, data from TeamLease showed.
Sources said CashKaro and Khatabook are some fintech companies that are hiring.
In start-ups associated with services of essential items like grocery, demand for delivery personnel, packers and loaders will remain high. Analysts at TeamLease said salaries for workers in the categories may go up due to the labour crunch stemming from movement of migrant workers. “Companies may give lucrative variable payout,” they said.