2019 was a golden year for Startups, with a sudden flush of investments across different sectors. This trend continued with India receiving close to 6.2 billion USD around the second quarter of 2020. This deluge of cash led to an increase in hiring and that created thousands of Jobs for freshers. But, as the virus started spreading, investments started shrinking with a whopping dip from 3.3 billion to 1.5 billion within a few weeks. 

COVID-19: the culprit 

As pandemic restrictions started lifting, resilient businesses got up quicker and generated a slow but steady increase in funding for the next two years. It exceeded the expectation of experts when the growth hit a record high of 14.8 billion in the third quarter of 2021, which was the highest-ever funding witnessed in the Indian Tech space. 

This created a false sense of growth due to which businesses, especially startups in the IT sector launched a lot of job opportunities which created Job Vacancy in Delhi and other metro cities. However, this euphoria was quite short-lived as the beginning of an economic slowdown in 2022 led to a severe decline in funding and investors became hawkish with their money.

Funding Winter 

“Funding Winter” as it’s being termed by people has now deterred those wishing to launch their startups or even approach investors to fund their startups or business ideas. But this news doesn’t bear consequences just for people in the startup ecosystem. It spells gloom for Freshers or individuals wanting to migrate to metro cities and wanting to taste the success experienced by earlier ventures.

The challenges now experienced by this funding winter are manifold and will impact not just people associated with startups, and venture capital, but experienced individuals wanting to shift work environments, and mostly this brunt will be borne by Freshers who may have to wait for Job Vacancy in Mumbai, and other metro cities to open up again.  

Steps to counter this Winter 

The rising numbers of Unemployed youth coinciding with this phenomenon cement the fact that funding winter has had a deep impact on the job market. This presents a bigger challenge to the government’s ‘Make In India’ plan. Without significant funding, budding entrepreneurs may never get the desired take-off for their ideas to turn into profit-making businesses.

Though the government has come up with steps to provide a cushion to Startups and incubation centres by offering tax incentives, rebates and some initial interest-free loans. These steps are not enough to make anxious, nervous startup employees from leaving their under-threat jobs and revert to stable ‘ classic’ 9 to5 jobs.

Future of Startups

This switch will open up more Job Vacancy in Delhi, as Delhi serves as a hub for small businesses, MSMEs, big MNCs and other corporate houses. A recent report by ‘India Venture Debt Report 2022’ has shed light on start-up funding through venture debt which has nearly doubled in the last year. However, there’s still a ray of hope as India is home to 103 unicorns with a total valuation of $335.80 billion (Source: Invest India as of June 29, 2022). 

As long as there is growth in entrepreneurial innovation, there will be job creation. This funding winter may soon become a cyclical phenomenon. Nonetheless, startups should retain the advantage they built over the years. Thus, the real challenge is not just to survive this winter but to stay alive and navigate all the turbulent seasons to come.