SIX in 10 startups see funds drying up in six months due to the impact of the new coronavirus disease 2019 (COVID-19) pandemic on their operations.
The 2020 Philippine Startup Survey: COVID-19 Edition showed almost half of the founders say COVID-19 has significant impact on their business operations, and this is causing them great concern.
About 62 percent say they only have a cash runway of up to six months, and 70 percent say they can only sustain by up to six months if the enhanced community quarantine (ECQ) is extended. However, interestingly, 21 percent of the founders say that COVID-19 is positively impacting their businesses, with an increasing demand for their products and services.
The survey conducted by Isla Lipana & Co./PwC Philippines (PwC), asked startup founders about the challenges and concerns brought about by the pandemic as well and the ECQ in Luzon and other parts of the country.
The report showed some startups are thriving in this new environment, particularly those in grocery and fresh vegetable online delivery, and those working with the Department of Health and other government agencies.
One of the biggest challenges faced by startu[s is the impact on their cash flow, PwC said, with a number of startups unable to collect from their customers before the lockdown.
Even if they get to collect, a recession may slow down projections, which were once very optimistic, the PwC said.
Alexander Cabrera, PwC Philippines chairman and senior partner, is optimistic the Philippine startup ecosystem will survive the pandemic.
“Our country has creative and agile entrepreneurs. In fact, according to our survey, 49 percent of the founders started offering new products and services to adapt to the consumers’ needs. With the proper guidance and support from both the government and private sector such as grants, financing, and incentives, our startups will get through this,” Cabrera said.
