Startup Street: State Of India’s Startups Amid Covid-Hit Economy
This week on Startup Street, we take a look at the state of India’s startups amid an economy struggling to emerge out of the coronavirus pandemic. We also highlight some of the updates around startups that were reported during the week. Here’s what went on.
Nine out of every ten startups have seen a decline in revenue, according to a month-long online survey conducted in April, by Nasscom. The survey was taken by over 250 startups ranging over diverse sectors such as travel, healthcare, edtech, fintech, retail and others.
Covid-19 is the single largest challenge India’s nascent startups have faced with 92 percent of those surveyed reporting a decline in revenue.
There are, however, some greenshoots. Around 14 percent of Edtech, Fintech and Healthtech startups expect a growth in revenue. Also, business-to-business startups are faring better than others, the report said.
The survey also showed that survival of many startups is at stake as their ability to continue operations dropped due to a slump in revenue and funding challenges.
Most start-ups see new project pipeline and scale as struggles in the future.
Nearly 70 percent of business-to-business startups cite client payment delays as a major issue, with retail and fintech start-ups most impacted. Seven in ten B2B startups are also reducing their marketing spend significantly, the report said.
Business-to-consumer startups in the delivery space are facing immense manpower crunch, it said.
Nine in 10 travel and transport startups have been impacted by the global pandemic while eight in 10 agri and fintech startups are facing a “significant funding crunch”.
Majority of startups expect the impact from Covid-19 to last upto 12 months, according to the Nasscom report.
On the other hand, 54 percent of the startups are looking to pivot into new areas.
Even with a few emerging opportunities, India’s startups need immediate government intervention to be able to survive, the report said. “To ensure that the Indian start-up movement and its growth trajectory is not derailed, coordinated support from key stakeholders is the need of the hour,” Debjani Ghosh, Nasscom President said.
“Some of our key recommendations to the Government includes access to working capital, easing compliance and fiscal policy and funding support.”
Airtel Acquires Stake In AI Startup Voicezen
Bharti Airtel Ltd. has acquired a 10 percent stake in Gurugram-based start-up Voicezen, which focuses on conversational artificial intelligence technologies, in an all-cash deal, the private telecom operator said on Thursday.
The stake purchase will give Bharti Airtel preferred access to Voicezen''s technology, which can be deployed across its customer touch points in multiple languages, Airtel said in a statement without disclosing the amount it paid for buying the stake.
The acquisition has been made by the company under its fast expanding Airtel Startup Accelerator Programme, the company noted.
AI is a big focus area for Airtel given the deep positive impact the technology can have in transforming customer experience. Voicezen has built some promising products that are very relevant for a market like India. We look forward to partnering them in scaling these innovative ‘’Made in India, for India’’ applications.Adarsh Nair, Chief Product Officer, Bharti Airtel
Voicezen has been working on developing advanced solutions that leverage machine learning, AI, speech to text and voice technologies to offer real time analytics to help brands engage with customers.
The global conversational AI market size is expected to grow from $4.2 billion in 2019 to $15.7 billion by 2024, according to a research report. The mega-trend will be driven by surging demand for AI powered customer support services and omni-channel deployment and increasing customer engagement through social media platforms and integration of advanced AI capabilities will offer massive opportunities, the statement said.
The investment will give Airtel preferred access to Voicezen's technologies, which can be deployed across its customer touch points in multiple languages. These intelligent solutions will offer real time analytics and insights to make Airtel's conversations with its customers.
Voicezen founder Apurba Nath said that the company has worked on AI solutions in the past and knows that what works well in a lab most often doesn't work in the real world, because either the training data is not large and relevant or the problem has little business significance.
"Our partnership with Airtel helps us solve these challenges. With this strategic investment, we will work even more closely with them to continuously improve our AI models and build out an enterprise-grade, battle-hardened product that will make customer interactions more efficient, especially in this post-COVID-19 world where business operations are facing large disruptions," Nath said.
According to a BSE filing, the acquisition was made in an all-cash transaction basis and the deal is expected to close by May 30.
DPIIT Receives Four Bids For Consultancy Agency For Startup India
The Department for Promotion of Industry and Internal Trade has received bids from four consultancy firms for assisting in effective and on-ground implementation of initiatives for startups.
Grant Thornton India, PricewaterhouseCoopers, Ernst & Young, and KPMG Advisory Service are the consultancies that have submitted the bids, according to the minutes of a meeting that was held on May 15 to evaluate preliminary proposals.
These firms would be invited to give a technical presentation.
In March, the department has floated a notice inviting request for proposal from interested agencies for appointment of a consulting agency for Startup India.
The department had proposed to engage a consultancy organisation to provide support for a period of three years, extendable by one year at a time for a total duration of five years, to assist and support the DPIIT in effective and on ground implementation of Startup India Action Plan.
The minutes of the meeting said that based on the observations, these bidders were found to be qualified and accordingly it was decided to call them for technical presentation. "However, the date for technical presentation would have to be rescheduled because of the travel restrictions owing to Covid-19 situation, and new dates will be intimated soon," it added.
The agency will have to support the department in scaling up the Startup India initiative through manifold interventions considered important for building a strong ecosystem for budding entrepreneurs.
The main objectives include handholding, supervising and monitoring implementation of recommendations for next three years; examining the need of current ecosystem; and provide short, medium and long-term suggestions for implementation by various agencies in consultation with various stake holders to scale up the initiative; and undertake the state startup ranking exercise every year by coordinating with states and other stake holders.
Yogi Adityanath Launches Uttar Pradesh Startup Fund
Uttar Pradesh Chief Minister Yogi Adityanath on Wednesday launched the 'Uttar Pradesh Startup Fund' and handed over the first installment of Rs 15 crore to the Small Industries Development Bank of India.
Speaking on the occasion, the chief minister said it was important to bring a new startup policy for agriculture, health, education and other important sectors so that the youth can connect with it.
This move will boost job creation and a memorandum of understanding has been signed between the state government and SIDBI with this aim in mind, he added.
He said a large number of migrant workers have come to Uttar Pradesh at this time and the state government is looking to provide them employment as per their skill. This will not only solve their problems but the benefit of their energy and talent will also be provided to the entire country through Uttar Pradesh, he said.