Start-ups seek tech giants’ support to break Covid-19 logjam

By: |
Published: April 17, 2020 5:55 AM

Start-ups are requesting financial support from investors, government agencies and banks.

IAMAI had reached out to over 2,000 start-ups in more than 10 cities to understand the concerns.

The havoc wrecked by Covid-19 in the marketplace has start-ups scramble for backing from large players in the industry. Close to 400 tech start-ups, which responded to a survey conducted by the Internet and Mobile Association of India (IAMAI), have stated that they were looking at immediate relief and support from large technology companies to overcome the current crisis.

The start-ups said that any relief in the form of discounts in server hosting charges, moratorium on billing from large publishers and rebate on monthly rentals by tech service providers, among others, will help them overcome the losses due to lockdown that has deeply impacted their businesses. The association said it was deeply concerned about the start-up ecosystem and will formally appeal to the large tech companies to extend all support and ensure business continuity of start-ups.

IAMAI had reached out to over 2,000 start-ups in more than 10 cities to understand the concerns, the current impact on digital start-ups and the kind of support these start-ups expect. When asked, majority said that they expect partial relief in hosting charges or a waive-off for the next two quarters. Digital start-ups mostly host their services on platforms owned by tech giants. In the present scenario, they expect relief from the big cloud hosting platforms.

Start-ups also depend on larger publishers and platforms for promoting their businesses through video ads, display ads, search and banner for which they are required to make payments as per payment terms. Start-ups are seeking some moratorium or discount on the billing during this phase, IAMAI said.

Start-ups also expect the industry to come forward and allocate part of the CSR fund to support them in sustaining their business. The fund, they say, can be released through registered incubators or any such authorities working closely with start-ups.

On the role of investors and funding, start-ups expect investors to help them with small investments to overcome the crisis. According to the findings, funding is the biggest ask for almost all start-ups for their survival. Start-ups are requesting financial support from investors, government agencies and banks.

Respondents mentioned that they would need more guidance and mentoring than ever. Start-ups will need quick mentoring on how to balance cash flows. Also, they feel work order from large companies should help them in generating revenues and support on marketing and promotions to revive business post-lockdown, according to IAMAI.

The survey was conducted with start-ups based in Bengaluru, Delhi, Mumbai, Thiruvanthapuram, Kohikode, Gurgaon, Pune, Kolkata, Raipur, Bhubaneswar, Ranchi and Hyderabad, among others. These start-ups were from various sectors like agriTech, AI, augmented reality and virtual reality, cryptocurrency, automobile, cyber security, digital agency/ network, e-commerce, EduTech, fintech, foodtech, gaming/eSports, healthtech, IoT, manufacturing, traveltech, UX/UI and blockchain, among others.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Bitcoin now as big as Coca Cola, Intel as crypto bellwether hits market cap milestone
2Now doctors, CAs, lawyers also can get loan under MSME emergency credit scheme as govt relaxes criteria
3MSME credit guarantee scheme gets a massive boost: Now, individual entrepreneurs can also apply for loans