Amid Covid pandemic, startups have been trying to reorient themselves by resetting their cost base with a focus on core businesses and avoiding cash burn as much as possible.
Google has expanded its early-stage startup accelerator – Google For Startups (previously Launchpad Accelerator) to provide support to startups working on solutions for the post-Covid world. The accelerator on Wednesday opened applications for the new batch of the accelerator focusing on healthtech, fintech, edtech, agritech, retail and software-as-a-service startups. Amid Covid pandemic, startups have been trying to reorient themselves by resetting their cost base with a focus on core businesses and avoiding cash burn as much as possible with limited marketing and hiring. The ecosystem support from various stakeholders including technology players like Google is likely to help such startups.
“The pandemic has fundamentally changed the landscape, and startups, in particular, are deeply impacted since they operate with lean teams and resources, and far less cushion than a scaled enterprise,” said Paul Ravindranath G, Program Manager, Google for Startups Accelerator India.
According to a LocalCircles survey receiving over 28,000 responses from more than 8,400 startups, SMEs and entrepreneurs, only 16 per cent have the cash to exist for just over three months while 42 per cent are already out of capital or likely to shut down. Also, 80 per cent of them have cut or deferred their marketing, HR, and fixed operating costs along with tax payments in the past three months to survive.
“The situation with us and I think for most of the early-stage startups is still very precarious. We don’t have money to pay salaries while revenues have been near zero. I don’t think the situation would improve in coming months looking at the rise in Covid cases. We are trying hard to avoid a temporary shutdown,” founder of a Delhi-based food tech startup told Financial Express Online.
Another survey of over 250 startups by Nasscom in April this year said that around 90 per cent startups are staring at revenue decline while around 30-40 per cent have temporarily stopped their operations or at the stage of shutting down. Around 70 per cent of startups added that they have cash available for less than three months.
In addition to the accelerator support, Google also launched a guide for startups called Emerging stronger: Playbook for Startups to Face the Covid-19 Challenge. Areas such as thinking strategically about startup’s future, managing cash burn, identifying new revenue sources, managing productivity during work from home, case studies of startups that have adapted to Covid realities are compiled in the book. The contributions have been from startups, investors such as Prime Venture Partners, Blume Ventures, Matrix Partners, and startup mentors over the last two months.
“We have been working very closely with over 250 Startups founders over the last two months, holding consults with our network of experts, mentors and VCs to help solve for the immediate challenges faced by the founder community,” said Ravindranath. Meanwhile, the new batch for the accelerator will begin in August 2020. Google’s accelerator has so far supported more than 60 startups in India.
Meanwhile, Microsoft had launched a programme for startups in the agritech space earlier this month. Microsoft for Agritech Startups programme would offer Microsoft’s cloud platform – Azure FarmBeats built for agriculture segment on top of the company’s cloud computing services Microsoft Azure. In February, Microsoft had launched the 100X100X100 program for B2B SaaS startups in India wherein 100 companies will commit to spending $100k over 18 months on solutions offered by 100 early and growth SaaS startups that have enterprise-ready solutions.