Business Standard|March 22, 2020
Take the example of True Elements, a Pune-based consumer-focused start-up that offers health food. Sreejith Moolayil, co-founder of the firm, claims he is finding it tough to keep it afloat. The lockdown, which was put in place to stop the rapid spread of coronavirus, has gripped the entire state. “As a startup, we would be in a big mess because 15 days’ shutdown means our cash flow for those days is gone. I don’t know how I am going to pay salary to my employees. I am not a big-time venture capital-funded company,” said Moolayil, whose firm has 115 on its roll.
For him, the other problem is that around 40 per cent of his production staff members have gone back to their hometowns due to the pandemic.
Though the company, which sells health foods online, is witnessing a huge demand for its products, it is not able to meet the requirements. The firm is moving its production to a small town, 200 km away from Pune. “If there is an overall India lockdown, we won’t survive for more than a month,” said Moolayil.
The example of TheWowBox is also somewhat the same though the start-up faced a slightly different challenge. The Mumbai-based company offers a discovery platform for new consumer products. As part of its promotion initiatives, the firm distributes newly launched products of different companies and also promotes entertainment events. According to its founder and chief executive officer (CEO) Nikunj Bubna, all these have to be completely stopped since consumers are now focusing on buying only essential items. “Our business has straight gone down to zero. We are having a warehouse where products or samples worth lakhs are on the verge of expiry,” said Bubna. “Our fundraising process also got impacted.”
True Elements and TheWowBox are among several such start-ups and small businesses that are facing major challenges due to COVID-19.
According to a survey by community platform LocalCircles, early-stage start-ups, funding dependent start-ups and many small businesses will soon be fighting for survival.
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March 22, 2020