PHD Chamber organizes ‘Interactive VC Meet on Enabling Startups Ecosystem to Fight COVID-19’
April 27, 2020
PHD Chamber organizes 'Interactive VC Meet on Enabling Startups Ecosystem to Fight COVID-19’
PHD Chamber organizes an Interactive VC Meet on ‘Enabling Startups Ecosystem to Fight COVID-19’ on Saturday, 25th April 2020 with an objective to highlight burning challenges of COVID-19 faced by startups and to discuss possible solutions for the survival of startup ecosystem. The session was attended by 218 participants.
Dr. H. Purushotham, Chair and Managing Director, National Research Development Corporation (NRDC), Ministry of Science and Technology, Government of India in his theme presentation explained the major challenges for startups such as lack of workforce, lack of funding, disrupted operations, disrupted supply chain, zero networking event/road shows. He requested investors & venture capitalist to support startups for 6 to 9 months and help them to fight the situation. Dr. Purushotham mentioned that startups should focus on leveraging Science, Technology, Innovation and ICT; it is an important time period to entrepreneurs for developing new ideas and innovations. Various countries are reducing their business exposure from China and are looking for India states for their business; this may open numerous opportunities to Indian startups. He mentioned that government has provided a fund of Rs 15,000/- Cr. to support startup ecosystem. Other government bodies such as DST, DBT-BIRAC, CSIR, DRDO, BARC, NRDC, PSA, ICMR, MeitY has announced funding support for development of new idea or innovative technologies. Dr. Purushotham also highlighted the role of NRDC in supporting startups through innovative POC tested technologies, free of cost fast track patent filing, equity investment scheme support, etc.
Mr. Sandeep Varma, General Manager, SIDBI Venture Capital asserted that SIDBI is primary institution working for MSMEs. To increase lending capacity of NBFCs, Bank and all lending agencies, RBI has issued 15000/- crore to SIDBI; 25000 Cr. to NABARD and 10000 Cr to NHB. To fight COVID-19, SIDBI is working to increase liquidity and to provide support to the borrower, directly through schemes such as Safe+ in which SIDBI is supporting those industries who are engaged in fighting with COVID-19 directly such manufacturer unit of mask/sanitizer, ventilator. SIDBI is also managing ‘Fund of Fund for startups’ a scheme by Ministry of Commerce and Industry, Govt. of India to support AIFs who are registered with SEBI, and provides equity supports to startups who are investing twice the amount borrowed. Under the schemes SIDBI has funded 4000 Cr to various AIFs through which 30000 employment has been created in around 330 startups. Mr. Varma added in his comment that due to COVID19 situation all the AIFs are going to face difficulty in raising equity particularly industries from overseas. Since investors stops investing it will create lots of complications to AIFs which in terms hit the startups severely. SIDBI came with COVID19 Startup Assistance Schemes (CSAS) early in the month of April 2020 to provide direct lending to Startups in a very nominal interest rate of 10.5% per annum, reducing balance, for the tenure up to 3 years (max). Mr. Varma said that SIDBI has received more than 400 queries and about 70-80 applications where already received where first line applications has already been sanction for CSAS schemes. Dr. Varma mentioned that Unit economics is very important, if unit economics is positive than there is good chance of any business stability.
While speaking at the Webinar on ‘Enabling Startup Ecosystem to Fight COVID-19’ Dr D K Aggarwal, President, PHDCCI said that ‘Lockdown’ can only stop viral spread, but the ultimate solution lies in the development COVID-19 vaccine only. Dr. Aggarwal mentioned that every startups/MSMEs should focus on business continuity instead of growth, along with liquidity and employee safety. The government should come forward with grant support for survival of startup ecosystem and 50%-60% of salary of Startup firm should be paid by the Government to cover the crisis. There should be complete tax exemption when a startup is selling their asset for their project investments. Dr. Aggarwal suggested that every startups to follow and access Business Immunity Portal, managed by Invest India for support and information.
Mr. Ashish Aggarwal, Chair, Startup Forum, PHDCCI moderated the session and mentioned that Startups are the backbone of Indian economy especially in front of GDP growth and employment. Mr. Aggarwal said that capital is very crucial for startups, unfortunately in this pandemic situation of COVID-19, 41% of Startups in India do have less than 3 months of capital to run their business and to cover their liabilities, since most of the investors stopped funding. Remaining percentage of Startups is also facing slowdown in funding from the investors. Mr. Aggarwal mentioned that damage can be minimized if not avoided through grant support, liquidity boosting and liquidity preserving, employee protection and fund creation to support startups. He appreciated the startups who have taken this challenging situation as an opportunity to fight COVID-19.
Mr. Anupam Jalote, CEO, iCreate, said that iCreate supports projects from the idea stage to its successful commercialization. The objective of iCreate is to convert tech innovation into a successful enterprise which may require support up to 6 years. Within 7 years of operation iCreate supported 231 projects to complete business cycle. iCreate is also supporting a startups to create portable sterilizing device which took time period of 14 days to touch the market. Mr. Jalote said that only fit (Strong product Market) startups deserve to survive and hence are supported by investors/VC. Startups must understand the area of their expertise and should map the same as per required situation.
Professor (Dr.) Harvinder Popli, Director, DIIF stated that DPSRU is funded by Delhi Government and 15 Startups are functioning in their incubation centre. Currently, their Startups are working in government tested/approved disinfection in association with Defense Research and Development Organization (DRDO), Ministry of Defense, Government of India. Another Startups of DPSRU is working in production and supply of alcoholic and non-alcoholic sanitizers (both tested and approved by government of India). Three Startups are working vigorously in production and distribution of Mask, diagnostic kit and ventilator. Dr. Popli told that lack of capital fund and distorted supply chain are affecting functionalities of major startups.
Mr. Sanjay Aggarwal, Sr. Vice President, PHDCCI delivered his concluding remarks and mentioned that Startups should define new paradigm of sustainable business keeping close eye on new innovation and ideas that can play important role in post COVID-19 situation in India.
Session was attended other dignitaries Mr. Sumit Duggal, Co-Chair, Startup Forum, PHDCCI and Mr. Saurabh Sanyal, Secretary General, PHDCCI.
Media DivisionPHD Chamber of Commerce and Industry