More than six dozen startup benefactors, venture capitalists and lobby groups in India have requested the government to grant them a “robust relief package” to help combat severe interruptions their businesses face due to the coronavirus outbreak.
In a joint letter to India’s Prime Minister Narendra Modi, startups requested the government to bankroll 50% of their workforce’s salaries for six months, provide interest-free credits from banks, waive lease for three months and furnish tax benefits among other things.
“Unfortunately, our startup companies across the nation are inherently young, little pliable and most vulnerable. Many of them face likely anguish during this extraordinary economic downturn. At this catastrophic time, Indian startups need a robust comfort package from the authorities concerned, lest all our collective efforts of the past few years are in vain, ” they wrote in a seam letter to the Prime Minister Narendra Modi late last-place month.
Among those who have signed the note include Mohit Bhatnagar, a managing director at Sequoia Capital, which is in advanced stages to close a fresh $1.3 billion store for India and Southeast Asia, Gaurav Agarwal of online prescription collect 1mg, Debjani Ghosh of industry organization Nasscom, Karthik Reddy of Blume Ventures, Anand Lunia of India Quotient, Deepinder Goyal of Zomato, and Sriharsha Majety of Swiggy.
Some prominent startup founders and VCs including Vijay Shekhar Sharma of Paytm, and Ritesh Agarwal of Oyo, have also held a meeting with Piyush Goyal, the commerce minister in India, for a similar relief.
“We seek your urgent intervention to help ensure India’s startup ecosystem lives this crisis to emerge as a pillar of growth, employment and innovation to help drive India’s recovery. We need the startup ecosystem to survive in order to help the economy bounce back. We have enclosed herewith our submission for your style consideration and we look forward to your backing regarding this matter, ” the joint word reads.
The request for bailout comes amid a national lockdown in India that has disrupted countless firms. New Delhi required a 21 -day lockdown last-place month in a bid to curtail the spread of Covid-1 9.
Earlier this month, ten foremost VC and PE stores in India cautioned startups to brace for the “worst” months onward.
“Assumptions from bull market financings or even from a few weeks ago do not apply. Numerous investors will move away from thinking about’ swelling at all costs’ to’ tolerable raise with a route to profitability.’ Adjust your business project and messaging accordingly, ” they said.
As India, where the economy growth has been slowing for several quarters, scrambles to provide for its 1.3 billion citizens, the character has gleaned some assessment from industry figures.
Disappointed to see numerous startup supervisors& investors that I admire add their honours to this shameful letter to the govt asking for bailouts- surely at this time the govt has more important things to worry about than spend “5 0% of salary greenbacks& contract wage legislations pay back startups”
— Sumanth Raghavendra (@ sumanthr) April 10, 2020
“I can’t fathom how such a list get constructed in a country of more than a billion people who are facing a crisis unlike any they’ve seen before. A substantial majority of them daily wage earners who have no financial cushion or any project where their next snack is going to come from. Let’s not even stray into health and the be required for medical emergencies; really putting three square meal on the table a era is proving to be impossible for so many, ” wrote Ashish K. Mishra in a article on The Morning Context.
“At this very moment, it is they who need the government’s support. Not fat cats with bloated, middling business sits and venture capital funds whose pleading bowls are now seemingly larger than their risk appetite, ” he added.
Companies asking for a bailout is not limited to India. Oil whales have sought similar improve from the U.S. President Donald Trump. But startups have largely been out of the picture. Brent Hoberman, chairman and co-founder of Founders Factory and Firstminute Capital, urged the UK government to provide some succor to startups last-place month. But the government has yet to do much about it, just ask Deliveroo, Graphcore and other large-scale UK startups.
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