IIFL to support fintech startups amid COVID-19 crisis
Financial services group IIFL on Wednesday said it has launched an initiative to support fintech startups that are facing funding and growth challenges due to the COVID-19 pandemic.
The initiative, named #IIFLDisrupt, will help fintech startups by providing funds, becoming their first client, and giving access to mentors.
"COVID-19 has disrupted the whole world. The post-COVID world will see revolutionary fintech disruptions. We are keen to partner, invest, collaborate with fintech startups passionate to disrupt and change the world of finance," IIFL Group Chairman and Founder Nirmal Jain said in a release.
"We are looking out for fintech startups that can disrupt the existing chain, digitise the process, increase productivity, and boost various aspects of the business," he said.
Under the initiative, accelerators and incubators across the country are also invited to collaborate for providing assistance to fintech startups.
The group had raised two seed venture funds of about Rs 1,000 crore each in the last five years and made multiple investments in startups including food delivery services firm Box8, conversational artificial intelligence (AI) startup Uniphore, digital lending platform NeoGrowth, and online fashion marketplace Fynd.
A Nasscom survey conducted in May showed that 70 percent of startups have less than three months of cash runway.
The industry body’s month-long e-survey, which was conducted to study the impact of the COVID-19 pandemic on Indian startups, found that around 40 percent of startups have either temporarily shut down operations or are on the verge of shutting down.
At least 65 percent of startups are facing “significant negative impact” on funding due to the COVID-19 crisis, with most early-stage startups facing a major funding crunch.
Among sectors, agritech and fintech startups are the worst hit when it comes to funding, while healthtech is emerging as the only sector witnessing a more favourable funding environment, the Nasscom survey found.
(Disclaimer: Additional background information has been added to this PTI copy for context)