Many experts believe that while the already promised investment may make way into the startups, new funding, particularly for early-stage startups, will be slow and in few cases nil
Hyderabad: The Coronavirus pandemic has caused a lot of issues for many industries and the ever-growing startup ecosystem will also take a hit. While on the one side, the virus is providing opportunities to many innovators, it is also halting the funding that the ecosystem is heavily depended on.
Many experts believe that while the already promised investment may make way into the startups, new funding, particularly for early-stage startups, will be slow and in few cases nil. “Startups working in sectors like healthtech, deeptech and fintech may see some growth in funding, other startups may see some halt in funding as the situation is very uncertain even for investors and venture capitalists,” said Sanjay Enishetty, MD and CEO, 50K Ventures.
Now is the time for startups to rethink their strategies and focus more on preserving cash for the next one year at least. Experts also point out that startups need to look at how to conserve cash and explore new business opportunities and not rush for more funding at present.
“Fundraising will be a little slower for at least the next two quarters. Having said that, there will be some sectors which might gain from this scenario and could see some VC investment immediately,” said P S Sreekanth, head, venture capital, Jubilant Bhartia Group.
“Any funded company will be fine, however, new funding opportunity will definitely be hit for a few startups and that is why it is important to conserve the existing money that they have,” said a Hyderabad-based startup founder.
However, some investors are hopeful that this crisis will lead to a growth of new ventures and it could lead to fresh investments in those areas. For example, recently a Hyderabad-based ambulance service provider StanPlus raised an extended seed funding of $1.5 million led by Pegasus FinInvest, Hyderabad Angels and the company’s existing investors.
