Indian tech startups are now witnessing a gradual road to recovery as the country continues to take strides towards digitisation across sectors. As per the findings of the Nasscom Start-up Pulse survey II, revenue acceleration and funding has improved the cash availability with startups. Forty-three percent of tech startups have a cash runway of more than 6 months, as compared to 8% in the earlier survey.
As per the survey, almost 25% of the surveyed startups have been able to raise funds or find prospective investors as compared to 7% in the earlier survey. Sectors like Edtech, Healthtech, SaaS (Software as a Service), SMB continue to attract investor interest. There has been an increased interest from VCs (venture capitalists) and funding agencies to invest in seed-early stage startups.
There is likely to be a more judicious mix of revenue and operational efficiency going forward. Although pre-COVID funding levels may take longer, almost 50% of tech startups expect to reach pre-COVID revenue levels in the next 6 months.
COVID-19 challenges have necessitated tactical and strategic shifts amongst tech startups leading to rapid diversification and focus on deep-tech as the ‚ÄėNew Normal‚Äô, Nasscom says. 40% of deep-tech focussed startups built AI-based solutions, while over 60% Agritech and Health-tech startups are focused on AI-based solutions.
‚ÄúCOVID-19 has accelerated digital adoption and tech startups can leverage this opportunity with enterprise and SMB (small & medium businesses) clients for product adoption. Greater focus on the shift to online has also created new business opportunities,‚ÄĚ Nasscom said in its survey.
While the ecosystem continues to be cautious, it is increasingly looking at hiring talent with the right competencies. As per the findings of the survey, hiring freeze at tech startups dropped by 20%. Jobs with the right skills continue to be in demand. Digital skills ‚Äď data, AI, product management, cloud architects continue to be in high demand across the tech startup ecosystem.
The survey also found that startups are adopting multiple short- and long-term strategies to tackle the COVID-19 impact. 72% tech startups are enhancing their product offerings and investing in deep-tech solutions that enable automation and analytics for their clients. Around 60-70% of tech startups are re-looking at their business models ‚Äď expanding to newer verticals, building partnerships and enhancing existing solutions.
Sharing her thoughts, Debjani Ghosh, President, Nasscom, said, ‚ÄúThe 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. A large tech startups pool, strong innovation focus and entrepreneur‚Äôs zeal have been the growth drivers of this ecosystem. We are pleased with the way the ecosystem has been supportive of each other during these difficult times and hope that the industry retains its robust zeal to further contribute to reviving the economy.‚ÄĚ