25% of Indian start-ups in serious trouble: Gopalakrishnan

A quarter of India's startups would be in serious trouble if adverse consequences of the COVID-19 pandemic persist for long, according to information technology industry veteran Senapathy (Kris) Gopalakrishnan.

"About 25 per cent of the startups have less than six months of runway," the cofounder of IT major Infosy Ltd, told P T I. "They will be in serious trouble if the recovery does not happen in six months, it does not look like (happening within that period)."

"I would say 25 per cent of the startups will face serious challenges. If they are able to get additional investment, they will survive otherwise they will fail. Not all of them, some of them will fail," said the former President of the Confederation of

Indian Industry.

On the prospects of the remaining 75 per cent of Indian startups, he said there would be more failures if the coronavirus-triggered crisis lasts longer.

"There will be more failures, unless they get additional funding from existing investors or support from banks on working capital or support from government for some form of debt or grants. We will see more companies get hurt as this prolongs," said the Chairman of early stage startup accelerator and venture fund, Axilor Ventures.

The former CEO and Managing Director of Infosys Ltd, however, noted that the outlook for startups depends on the business segment they cater to.

"For example, e-commerce is starting to operate, some of the food delivery starting to happen. In the area of travel, mobility, for example passengers are not taking shared ride or not using taxi. The same vehicle can be used to deliver packages, food and grocery. People will have to pivot," Gopalakrishnan said.

Ankur Pahwa, Partner and National Leader E-Commerce and Consumer Internet, EY India, said start-ups in the mobility space will especially hope to quickly get back to normal although with more stringent hygiene measures in place, adding, some of the guidelines provide tail wind to them.