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Demonetization and its impact on startups

The great Indian surgical strike on corruption by banning Rs.500 and Rs.1000 notes has come as a historic step to put a curb on malicious acts that had hollowed our nation’s economy. The issue of corruption had long surround the Indian economy and with many governments failing to put a taboo on this, the recent demonetization steps taken by the honourable Prime Minister Shri Narendra Modi has come as a light at the end of the tunnel. 

Although we have seen positive inclination of people towards this step, there are a few people who are hindering this move. We cannot deny that this decision has left many business owners and small vendors left aghast. Let's see how the startups of this generation see demonetization.

Is it worth paying such a big price?

Let me begin this by quoting the statement by Sandeep Agarwal , founder of Droom and Shopclues, “ Modi government has always been focussed on motivating and creating a startup-friendly ecosystem which could help many people start off their own business. Demonetization is a bold step and in a positive direction to culminate the growth of black money that was slowly eating away our economy. Not only this will bring transparency but at the same time cut down the pace at which the fake currency was growing. Post Modi government’s support to the startups by creating various schemes and emphasizing on the digital economy, this is yet another step which will make India stand and compete on the global platform.”

“This move is definitely going to make us shift towards a cashless economy which is definitely more transparent and easy to trace as compared to the way in which we operate our business,” said Mr. Alok Mittal an active angel investor and CEO of Indifi Technologies.

When it comes to entrepreneurs then there is famous saying , “Every hurdle is an opportunity” and many new generation ventures proved so by promoting their brand and service as a way to easily sail through this storm of demonetization; I am talking about Paytm, FreeCharge, Mobiwik etc. these e-wallet companies have taken full advantage of the current scenario and are promoting themselves thoroughly.

After the announcement of demonetization i.e. Since 9th November, Paytm has subsequently witnessed an increase in the number of registration by 700% moreover, 100% growth in addition to money in the Paytm account has been observed. Furthermore, the average transaction value has escalated by 200% and Paytm application download has been increased by 300%.

Apart from these e-wallet companies, many e-commerce companies are offering special discount to those who are making online payment to purchase the product. Like is offering extra 10% off on online payment, even Snapdeal is providing an extra 10% off on all the orders which are prepaid.

These positive figures show that many startups have seen this as a way to increase their market share and establish their brand name. We still have one more month to go, to see how our economy will shape into but one thing is for sure that this move has definitely paved the way of opportunities for many companies to start off their venture.

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