Indore: Information Technology-based start-ups in Indore are struggling as their international clients have held back payments and are delaying projects by 6 months due to COVID-19.
Till now, IT start-ups in Indore have incurred an estimated $7,00,000 loss, according to industry experts.
The slowdown as affected income of all IT firms, but for start-ups, it is threatening their very existence.
Start-ups are praying that COVID-19 gets controlled at the earliest so that they can retain their clients and pay salaries of their employees. Some start-up founders fear that if this continues for another month, then they will have to lay off employees.
The condition of new start-ups is worse, as lay off has already begun and many young developers and digital marketers are jobless. Those who were working as freelancers via online portals are also out of projects.
Another aspect affecting IT start-ups is the cancellation of projects allotted to them for developing applications for events and tourism. Here is what some of the start-ups said about their current situation:
Combination of losses from COVID-19
“We have lost two projects already due to COVID-19. We were getting regular business on a monthly basis from Australia. But now that COVID-19 has affected the country, our business with the clients in the country has stopped and will be on a break for 6 months.
We are facing similar issues with other international clients from Europe as well. Companies working in event management, export and import, hotel and tourism are also facing big loss. These businesses are frequent clients for us and many other IT firms, so it is another loss for us as well.
Another major setback for all the IT start-ups is the cancellation of Dubai Expo 2020, where we get major clients. Further, we all had pre-booked tickets, hotels and other reservations, which added to unnecessary loss.”
-Shawez Shaikh, co-founder of Maven Cluster Software Pvt Ltd
No fund rotation
“Due to COVID-19, we are facing a fund crunch as there is no funds rotation. Further, the growth is becoming stagnant as we are unable to get any new international clients. One of our clients had planned to visit us to discuss more contracts last week.
Sadly, due to COVID-19 threat, he is stuck in Egypt. We are surviving on previous contracts, but even from previous contractor, we are not getting our payments. The clients are giving explanations quoting how their payments are stuck and hence, there is a crunch. It is a scary time for us.”
-Dikshant Mahant, founder of Ziasy Consulting Pvt Ltd
Living on savings
“I work for international clients through various portals. Due to COVID-19, clients are not paying their dues and it is impossible to get new projects. I am living on my savings for now. This is a really difficult time for all IT professionals. Many of my friends lost their job due to this as well.”
-Gaurav Roy, software engineer