Most start-up segments recover post lockdown; edtech & health care lead

The recovery in India’s start-up ecosystem is faster than was anticipated in the past few months  with the country minting four unicorns in the lockdown phase. 

For instance, 75 per cent of start-ups are gradually, but steadily, recovering post lockdown, according to TiE Delhi-Zinnov report released on Wednesday. Around 30 per cent start-ups have pivoted to newer markets for alternative revenue streams, while more than 55 per cent of start-ups are focusing on profitability and reducing cash burn.

Shift to digital consumption has provided the necessary tailwind to sectors such as education, health care, and e-commerce; while several sectors like travel, hospitality, and mobility, that were negatively impacted, are now on a recovery path. 

Additionally, the start-up ecosystem is expected to have created 700,000-750,000 direct and 2.6-2.8 million indirect jobs in total for the year ending 2020, further cementing its recovery. 

“Although the immediate impact of the lockdowns on the Indian start-up ecosystem was severe, we have been amazed to witness how quickly Indian founders have acted to reimagine their businesses. What has been the most impressive is how many start-ups have reduced burn and improved their unit economics very rapidly. Digitally-led segments have recovered much faster than anyone expected and in many spaces, demand is well ahead of pre-Covid levels,” said Ranjan Anandan, president, TiE Delhi and managing director of Sequoia Capital India. 

“Investor sentiment has also recovered quickly and we expect the Indian unicorn club to steadily expand through 2020 and 2021. Although Covid-19 has been a major setback for the ecosystem, we believe that the changes that the pandemic has brought on will make our ecosystem much stronger, across every dimension. India is on a path to have 100 unicorns by 2025.”