Hyderabad: For Hyderabad-based employee transportation company WhistleDrive’s founder and CEO Rakesh Munnanooru, the Covid-19 lockdown has taught him to stay put even when things are going haywire. The fact that the company raised funding recently has helped them sail through the difficult times and also offer interest-free loans to their driver-partners. Not only this, but they have also been able to retain employees without any pay cuts.

However, not every startup has such funding in place nor has the strategy to continue business even when there is no business. The Covid-19 pandemic and eventual lockdown have left many startups high and dry in terms of revenues, funding, which then lead to layoffs.

A recent study by LocalCircles pointed out that about 61 per cent of the startups and SMEs are staring at a possibility of scaling down their business in the next 6 months.

“Any funded company would be fine; however, it is a fact that all startups are in panic mode, and a few may shut down if the situation prolongs. It is a challenging phase to be an entrepreneur,” Munnanooru told Telangana Today.

New opportunity

If the virus has taught humans to be satisfied with just essential needs, then for startups as well it has taught them to look at new business models.

For Hyderabad startup Exprs, this lockdown meant moving a little away from their regular business model and offer door-to-door delivery of essential goods in gated communities. “Our other brand VDeliver is also gaining traction due to the lockdown,” says Srinivas Madhavam, founder and CEO, Exprs.

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Similarly, for Fego Innovations that was previously into making bike seats that reduce jerk by 46 per cent, the startup has moved its resources, both human and monetary, into making PPE kits that can be useful for front line medical workers. Another startup BlueSemi that was working on developing a chip that can keep the phone charged for six days, has pivoted its innovation and research model to enable sensor-based thermal screening of people in crowded areas.

“As soon as the news of Covid-19 started coming in, we thought of moving our resources to help the government and other agencies in detecting patients faster and easier,” Sunil Kumar Maddikatla, founder and CEO, BlueSemi.


LocalCircles survey also disclosed that about 47 per cent of startups and SMEs have less than one month of cash funds left and many are out of funds already.

The survey was conducted in the last week of March with startups and SMEs via LocalCircle submitting various demands to the government to help them tide through the current crisis. “These included reimbursement of 50 per cent of startup employee salaries for one month or a one-time Rs 20 lakh grant for government registered startups. Asks also included expediting PSU, government and large corporate payments to startups, processing TDS refunds for FY 2019-20 within 15 days and enabling CSR funds to be deployed into startups,” the report said.

Meanwhile, experts opine that funding will be an issue for the next few months especially for startups not working in health tech, deep tech and fintech space. However, there are other options that need to be explored in order to stay relevant.

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Software Technology Parks of India recently said that startups can leverage crowdfunding during challenging times like the one triggered by Covid-19 pandemic. It provided five tips on how to crowdfund during difficult scenario which includes — focus on the prelaunch campaign, building social media presence, plan email campaigns, stretching fulfillment deadline and finally to be transparent about the brand.

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