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Tag: lockdown

  • Coronavirus Impact on Digital Payments Startups

    Coronavirus is here, and it’s making a big impact on every aspect of business. From trade market swings to airline collapses, the economy of many industries is taking its toll and having major constraints. Whole worldwide especially in Europe, those living in Italy, Spain, Germany and France have been the most impacted so far and the situation is set to worsen. The indirect effects for startups have also been huge, but some businesses are faring better than others. While many struggle to operate amid travel turmoil, others are cashing in on the health crisis by supplying much-needed medical solutions. Some London founders even launched an entirely new startup (called Epiderm) this year to help track employee and visitor contact through check-ins and calendar analysis. Similarly, there are clearly dozens of sectors that will likely be impacted such as dating apps, concert booking apps, edtech, will-writing startups, fitness apps, remote working tools and recruiting startups and so on.Here we discussed about impact of Coronavirus on Fintech Startups.

    What about the sector of fintech?

    Like everything else, it’s also likely to be under threat. There’s more to come from COVID-19 in the coming weeks where large and small fintech companies take a hit. Some could even benefit. Fintech firms globally also have already benefited from more flexible regulations in both emerging and mature countries as many efforts are being made to improve financial inclusion and serve a broader digital economy. According to a report from Ecosystem, there were five key trends that were expected to shape the Fintech market during 2020. The coronavirus pandemic could be devastating for many companies, but it’s also shining a spotlight on the power of fintechs across the world. They seem to be responding to the sudden challenge effectively, though uncertainties lie ahead.

    Negative Impacts of Consumer Spending

    Fear, panic, and quarantine measure heavily impact consumer spending. Canceled flights, closed stores, and social distancing have resulted into a drop in transaction volume at all levels of the economy. This means FinTech firms in the payments sector like Paypal, PhonePe, Google Pay, Stripe, or Chime will collect fewer fees, negatively impacting their profitability and valuations. Hardware shortages could also impact firms like Square, that rely on digital devices to support transaction processing. It’s evident that large businesses are already feeling the heat with the coronavirus outbreak. Companies such as Mastercard and Visa have cut their predictions for revenue due to the scare. This is because many users of credit cards are unlikely to use it to purchase flights, which is one of the more common transactions for credit card use.

    The impact of the coronavirus outbreak is impacting both financial markets and consumer behavior as never before. At least in the short term, there has been a significant flight to safer investments by consumers, which could negatively impact venture capital funding of existing and new fintech firms. Combined with investors concerned with higher funding costs, the volatile market could be a catalyst for lower valuations. This potential drying up of financing to non-traditional financial services firms could force many firms to find collaboration or investment partners from traditional banking organizations. Some early-stage fintech firms may need to shut down.

    Chinese fintechs will likely face the worst negative impact from the virus. Funding for Chinese fintechs was already down in 2019, likely due in part to trade tensions between the US and China. In 2019, fintechs only secured $298 million, down from $1.8 billion during the same time the year before. Having originated in Wuhan, China, the coronavirus is making the country’s economic outlook particularly uncertain, and more investors may shy away from the market as a result. That means Chinese fintechs might need to prepare for an even less funding-friendly environment in 2020 and shift their focus to a sustainable business model.

    Positive Impacts

    Whilst we’ve seen many negative impacts recorded in the fintech sector, there is a bright side in which some companies benefiting from. It’s encouraged many companies to adopt fintech for the purpose of their business. For example, the Banking and Insurance Regulatory Commissions company Ye Yanfei explained that blockchain is being utilised for medical data verification. Similarly, consumers desire for digital banking services will most likely increase, forcing many traditional financial institutions to fast-track digital innovation efforts. As a result, many legacy banks and credit unions may look to fintech firms or startups for assistance in bringing better digital banking solutions to the marketplace during this crisis. This increase in demand for digital solutions could provide a lifeline to fintech firms at a time when VC funding may not be an option.

    In addition, weakening economies may force government organizations and regulators to stimulate the expansion of fintech solutions. For instance, South Korea is planning to temporarily ease regulations on fintech and ten other industries in March, in an attempt to jumpstart its economy amid the coronavirus outbreak. The World Health Organization has also encouraged contactless payments to contain the spread of COVID-19. Moreover, Google Trends shows a significant spike in the search requests regarding online loans which is a good news for many fintech firms.

    Governments are appealing for Cashless Payment

    Many countries are also encouraging the use of contactless payment to prevent the spreading of the virus any further from the exchanging of money. To ensure safety of citizens amid the coronavirus outbreak, the Reserve Bank of India (RBI) governor, Shaktikanta Das, asked customers to use digital banking facilities as far as possible. Das added, “In the context of COVID 19, RBI and the government together are giving emphasis on encouraging digital payments. And over a period of time, various measures have already been taken to establish safe, secure, stable and affordable retail payment system such as the National Electronic Fund Transfer (NEFT) and the Immediate Payment Service (IMPS).” In South Korea, where regulations were once considered rather strict in the fintech domain, they’re now willing to ease the regulations that they have. This is to lessen the impact of the virus spreading and having a larger impact on the economy.

    Reserve Bank of India(RBI) has appealed people to use Contactless Payment 

    It could boost demand for certain insurance types. The virus’ dominance in headlines may increase awareness of insurance and boost demand for health and life coverage, as well as business interruption and event cancellation coverage. For instance, the outbreak has led to many conferences and events being cancelled at the last minute. At the same time, insurers are not supposed to pay over claims of this outbreak. Most travel insurers, for example, exclude pandemic, epidemic disease or infectious diseases from their coverages, meaning that likely only few will be affected by the virus. A report has revealed India has shown a moderate increase of 7 % when it comes to availing online financial services during this period of social distancing.

    21-day Lockdown to promote Digital Payment

    India is currently going through a 21-day lockdown that was imposed by Narendra Modi-led central government, as part of its plan to battle the novel coronavirus COVID-19. Several prominent names in the Indian startup ecosystem have also been promoting digital payments. There are various digital payment channels people can use instead of transacting via cash. Digital payments channels include NEFT, IMPS, UPI, etc. Razorpay’s report highlighted that UPI, internet banking and wallet payments have all grown in India because of quarantine and social distancing. Surprisingly, Delhi and Bengaluru have noted a decline in digital payment but this is just a matter of time. Soon, digital payment will see a boom across all cities due to lockdown. So, this is a good opportunity for all fintech firms and startups to flourish.

  • 10 ways Startups should be Prepared for the Coronavirus Crisis

    The COVID-19 or Coronavirus outbreak has turned into a global emergency. It has no left no choice to entire nations but go into lockdown mode and economies prepare for impact. Many businesses across the world have already paused their operations as the pandemic requires social distancing, the closing down of services, offices and cancellation of events. Emergency preparedness plans have never been more in focus than this situation which has devasted many businesses.

    It’s true, we can’t neglect the fact that the Coronavirus hasn’t spared the startup communities. Just the opposite, many startup founders are worried about the consequences of sweeping lockdowns and restrictions and difficulty in managing to stay afloat and keep their staff onboard. In such situations, startups are more vulnerable than established corporations because of limited access to services & capital. So startups are understandably more worried. Many startups are calling for hiring slowdowns as well as spending curbs, cutting out travel and preparing for a very tough time ahead. For startups, funding seems to be the first casualty and those that are in the middle of a fund-raise or have small reserves of cash are looking for solutions. Those that have already raised funds and have at least six months of operating capital should be fine too. According to reports, though overall funding has slowed down, the best companies will still get funded with delays.

    However, pre-seed and seed-stage startups might find the going tough as burn rates rise and sales fall. It will be tougher for these startups to gain customers, find potential new business and scale-up. This, in turn, would make it more difficult to raise the next round of funding. Although we don’t know how the pandemic will play out over the rest of the year, it has many lessons on crisis preparation and management.

    This includes taking care of and preparing for impacts upstream and downstream as well as for potential impacts within the organization. Don’t forget that many of these ideas could also help lead generation and getting people to know about your company and your expertise, so the effort you invest in these good deeds will your company and help you too. Here are ten steps to keep top of mind while dealing with this crisis.

    Employees’ Safety first

    Your staff should always be your first priority. Make sure they are safe. That may mean rethinking some work practices – you may need to restrict travel and switch to meetings via video or audio conference calls. Some offices may need to temporarily shut and employees be asked to work from home; most companies have already implemented this for desk workers.

    Offer products and services free of cost

    During this coronavirus crisis, many messaging platforms,video conferencing companies, online learning platforms are free offering services and removing the limits on their services to help the students and employees working from home. Some startups have been wholeheartedly offering free or substantially discounted services and products to help. If your brand offers anything that can support either people hugely affected by the pandemic or those who are staying at home in a need of a boost to keep up with their lives, this is the right time to give a hand. This will leave a long lasting impression on people’s minds which will surely help in future.

    Also Read: Coronavirus Impact on Digital Payments Startups

    Work on innovative tech solutions to fight the Coronavirus

    What else could be better solution than finding the tool or technology that helps in containing the spread of Corona virus. If you have an idea for developing a tool that could in any way be of help in the fight of the COVID-19 virus, then start working on it right away. Even Government of India has also arranged COVID-19 Solution Challenge to encourage entrepreneurs to find a technology that helps find the coronavirus. The entrepreneur or startup providing the best solution will receive the money prize. So startups can see this as a good opportunity to earn funding during this crisis. Just act quickly and remember that even a simple app that would encourage the citizens to adapt more easily to the changed conditions can take your organization ahead.
    To know more about this challenge, visit the Official Website –
    https://innovate.mygov.in/covid19/

    Connect with the startup community

    Coronavirus outbreak has just started affecting the Indian market but it has affected Chinese and American market many weeks ago. So their experiences & mistakes in dealing the crisis can be used as guidelines on how to survive in the crisis. So it is advisable start connecting with the startup community not just in India but communities worldwide.  Some ways and solutions can definitely hey be found be found by interacting with these tech and start up communities. Just take Estonia, for example, whose tech community has already been tackling the coronavirus through various activities. Portugal has also put together a page for collaboration. There are many ways to help in the quick and smart development and implementation of the necessary measures. So, get as involved as you can and encourage others in your community to do so as well.

    Companies are organizing Hackathons for others to Participate remotely

    Organise or attend hackathons

    Many companies & startups have organised hackathon. This has paved the way and many innovative solutions that arose as a result of the to-date organised hackathons aimed against the Coronavirus are now on their way to be developed and implemented. So this can be done in India too. Many revolutionary products emerged exactly at these events and we now desperately need more of them to combat not only the emergency circumstances but effectively manage the post-crisis period and prevent further isolation and loneliness.

    Host free online webinars, podcasts or Q&A sessions

    In light of the latest developments, many event organisers are shifting their conferences online. It’s uncertain until when we’ll all be at home. So, people have enough time. This is the right time to stay connected. This can be done in many ways. One can go live – whether it’s alone, with your team or maybe with professionals from other startups. Online event, webinar, podcast, YouTube video, Q&A and what not available to keep in touch & increase the network. These platforms  can be used to give advice based on your expertise and help people to stay motivated.

    Offer your advice on remote working

    Majority of the companies have asked their employees to work from home. As a member of a startup, you are probably very well acquainted with the ‘working from home’ concept. But, bear in mind that millions of people have just had their first day working remotely. The newly-created situation has given thousands of managers no other choice but to lead their teams online, completely unprepared. This situation can be used to help them with tips in a blog, LinkedIn post, webinar to encourage people to get in touch by recommending them video conference tools & software.

    Also Read: 8 Tips to Stay Productive while Working Remotely

    Just Keep Marketing even in Crisis

    One of the biggest mistakes companies make in times like these is to cut back on marketing. It will be the end of you. At best, a slow death. Although, it is difficult to sell products & services in this time but it is a good opportunity to market your services & products. Do demand a better ROI on your marketing. This may be the right moment to expand and pick up the slack from your competitors and seized their market share.

    Check your coverage

    Business interruption coverage covers income lost when you close down your business due to a disaster. However, it typically doesn’t pay out unless there is physical damage to the business. Talk to your insurance agent to see what, if any, coverage you would have if coronavirus forces temporary closure. If got, this can be used to keep the money flow going.

    Have Patience

    This is the time wherein many entrepreneurs can lose their hope due to things not going well. It is hard to predict how long this is going to last. However, it is the most important to not give up. Though it may look difficult to put the things back on track, it is essential to have patience because like any other time, “ This too shall Pass.” Have faith.

  • How is Narendra Modi helping Startups Fight against the Coronavirus Outbreak?

    Due to Coronavirus outbreak, every aspect of business is suffering through many problems and challenges. Flight, hotel booking firms are the worst hit. There is stupendous drop in demand of gig economy. Whereas, at the same time, video conferencing providers and online education companies, messaging platforms and of course healthcare & pharmaceutical companies are witnessing a boom in demand but the situation has become for worse for the startups & small scale businesses as they have limited sources and capital.

    Effect of COVID-19 on Startups

    With reduced revenue and uncertainty caused by the COVID-19 outbreak, various tech startups not just in India but across the globe are temporarily letting go of workers to help keep their businesses survive during this collapsing economic period. In the past couple of weeks, the situation has become more extreme with a ‘State of Emergency’ being called in some countries, leaving other regions unsure of what’s to come next. Social distancing mandates are forcing businesses to shut down and heavily reduce staff during COVID-19 outbreak. The labour department is facing a rush of unemployment insurance claims which is likely to increase in the next few weeks.

    Coronavirus crisis is also affecting many aspects related to startups. For instance, postponing the EU-Startups Summit to April 2021. The EU-Startups Summit gathers over 1,500 founders, startup enthusiasts, corporates, angel investors, VCs, and media from across Europe. The two-day event is a great opportunity for networking, and a meeting point for aspiring entrepreneurs and investors who are aiming to build international tech companies. This summit was planned to take place on May 28-29 this year but now it is postponed to April 2021.

    Government’s Aid to Startups

    Today, the world is collectively dealing with the spread of Covid-19 and taking emergency measures to contain and eventually eliminate the virus. One such measure was taken by Indian government. Prime Minister Narendra Modi saw the power of the digital medium that can be utilised to serve the country and encouraged many of us to go all out to build a nationwide digital infrastructure. Modi’s ‘Digital India’ mission enabled India to build a robust mobile broadband infrastructure which accelerated the rise of technology startups in a short span of time. This is now coming to play a very vital role in supporting the PM’s call on social distancing while keeping the country moving during coronavirus pandemic.

    According to reports, a mega exercise to increase Indian startups’ visibility globally is in the works. For this, the government planning to hire a consulting firm to evaluate the progress of the Startup India programme to chalk out an action plan to attract investment and identify bottlenecks which prevent businesses and high-net-worth individuals from investing in them. The consultant will identify challenges in\ regulatory approvals, taxation, ease of doing business, global expansion and facilitate startups in getting access to markets such as in private and public procurement, both in India and abroad.

    COVID-19 Solution Challenge

    The government of India has realised the need to open up the search for solutions to the startup ecosystem with the ‘Covid-19 Solution Challenge’. On March 16,2020, Prime Minister Narendra Modi announced the launch of the challenge on the Twitter and urged startups and entrepreneurs to come up with their technology-backed solution to curb the coronavirus outbreak. Prime Minister Narendra Modi has appealed to public to share any technology-driven solutions for strengthening the fight against COVID-19, saying such efforts can help the government and make public join the mission against the virus.

    PM Narendra Modi announced the Challenge on Twitter on March 16

    PM Modi said, “Harnessing innovation for a healthier planet. A lot of people have been sharing technology-driven solutions for Covid-19. I would urge them to share them on the government-citizen engagement platform MyGov.in.”

    According to the MyGov platform, startups and individuals can send their ideas to help the government in fighting the coronavirus outbreak. Suggestions sent in will be evaluated by the government and some of the ideas will be adopted. The last date of submission of ideas for the Covid-19 Solution Challenge is on March 31. Participants can either send a document or a YouTube video of the idea using the MyGov Platform. The solutions that are deployed by the government will also receive rewards. INR 1 Lakh, INR 50K and INR 25K have been promised to the top three ideas respectively. This amount can be used as funding in startups. So it’s a good opportunity to earn funding just by pitching the idea.

    The government said that it has already started to get inputs from individuals and startups that have developed technologies and innovative solutions in areas such as bioinformatics, datasets, applications for diagnostics and more. These technologies are expected to soon become part of the government’s efforts in the fight against the coronavirus.

    Also Read: These Brands will Generate Massive Revenue During the Coronavirus Outbreak

    With increasing cases of people getting infected by the novel coronavirus, a group of entrepreneurs and venture capitalists had written to Prime Minister Narendra Modi suggesting a lockdown starting as early as March 20 across the impacted cities for two to three weeks; to which PM Modi has taken action by implementing Section 144 on account of which only allowed shops can remain open till March 31. So, it has become almost ceased all the operations for startup till March 31.

    According to experts, there are still ways to keep the operations going during lockdown too. According to top venture capitalists and entrepreneurs from India and China, overcommunication, keeping a cash runway and having a fixed routine despite working from home are some of the keys for startups to deal with the fallout from the novel coronavirus. While China is returning to normalcy and business as usual, the experiences of Chinese firms and entrepreneurs can serve as a reference point for Indian founders, where cases of the virus are still rising rapidly.

  • These Brands Are Generating Massive Revenue During The Coronavirus Outbreak

    Coronavirus has now spread to more than 157 countries all over the world and has been declared a pandemic. The number of coronavirus cases have crossed more than 3 million globally. In India, more than 30,000 cases have been registered with 1000+ fatalities. The coronavirus outbreak or COVID-19 has affected various sectors and industries, and many companies have taken the initiative to contain the spread of the pandemic.

    Apple shut down its stores in China and other nearby countries for implementing safety measures. The world’s second-biggest fashion retailer H&M has also closed stores Germany and the United States, the biggest markets. It also shuttered stores in Canada, Portugal, and Belgium. In India, the aviation and railway sectors are severely strained under the pandemic with revenues plummeting to record lows. Many airlines in India are unable to generate revenue in spite of lowering ticket prices.

    At the same time, the Indian railways has cancelled more than 70 trains for precaution and due to low occupancy. The consequent losses are mind-numbing and severe enough to cause heart attacks. The tourism industry worldwide has taken a severe hit. Many food chains and restaurants are struggling to sustain themselves as people are avoiding going out until and unless it’s an emergency. Not only this, several start-ups are bearing the brunt of the lockdown which is in place. In all, the economy has come to a halt and everything else to a standstill.

    On the other hand, the coronavirus outbreak is aiding several countries. The Chinese government gradually shut down public services, schools and several manufacturing plants since the mid of January, giving other countries an opportunity to step up their game in segments like manufacturing . China is the largest consumer and supplier of many products in the world which include spare parts, chemical, toys, lighting, base metals, oil, etc. Many countries, including the US and European Union, import these goods from China.

    Economic superpowers and behemoths are now reaching out to other countries to fulfill increasing demand. India is one such country which has seen a surge in exports in the wake of the coronavirus outbreak. Due to China’s temporary lockdown, the chemical sector will be amongst the biggest beneficiaries alongside other sectors like textiles, ceramics, sanitary ware, homeware, and engineering goods.

    These companies will benefit tremendously during the pandemic

    Although the novel coronavirus outbreak is crashing global markets and affecting everything from air travel and the film industry to local businesses, some companies will benefit from this situation. These include firms that sell deep-cleaning products, remote services like Peloton, Zoho, video conferencing tools like Zoom, and Purell, a popular hand sanitizer brand.

    According to a report, sellers of some lesser-known products also view the coronavirus as a unique business opportunity. These companies sell gadgets like air purifiers, robots, and even products like spit-shielding hats that help in combating the virus.

    Now, some of these vendors are actively promoting the link between their products and Covid-19. The result is strong brand value, publicity, and booming business. Not only this, the demand for face masks has increased significantly since governments, medical experts, and doctors are advocating the use of face masks to protect oneself from getting exposed to the virus.

    Hand Sanitizers
    Sale of Hand Sanitizers has seen a Boom like Never Before

    With people more worried about infection and germs, they are running towards disinfectant products such as hand sanitizers, hand wash, cleaning wipes, etc. People are turning to brands like Purell, Lysol, Clorox, Lifebuoy, and Dettol like never before. Consumer demand for hand sanitizers has grown by 1,400 percent from December to January.

    The demand is so high that Walmart stores, retailers, and pharmacies are short on stock, e-commerce platforms such as Amazon and Flipkart are also low on supply, and products are being sold at more than double their market rates. In fact, the black market for sanitizers, disinfectant wipes, gloves, masks, and PPEs is crazy! Manufacturers aren’t shying away from making the most out of the shortage of supplies. Meanwhile, even small firms selling such products are making considerable profits. It’s hard to believe but the shares of Clorox and other drug makers were on the rise in late February despite the economic slowdown.

    Also Read: 6 Must Follow Tips to Work from Home During the Covid19 Outbreak

    Phone and video conference software

    Even technology companies are reaping massive benefits in these trying times. Many phone and video conference software and tools are in high demand because organizations have chosen to implement work from home across offices and geographies. Famous work from home software & tools include:
    Webex – Web conferencing and video conferencing tool.
    Zoom – Team video conference tool.
    Skype – Online video calling tool.
    Slack – Team Communication and collaboration app.
    Zoho – Web-based business tools.
    GSuite  – Emailing and team communication applications.

    There are several other chatting & conference platforms in the fray as well. Due to massive demand, these companies are providing additional features at lower prices. Since a large number of companies are relying on these tools at the moment, this is a golden window for the providers of these tools and software to capitalize on the demand and stand out in the market.

    Online Streaming Platforms
    During Lockdown, traffic on Online Streaming platform will see Growth

    To no one’s surprise, the demand and traffic on many online streaming platforms like Netflix, Amazon Prime, Disney Plus, HBO Max, Hulu, etc. have blown through the roof. With strict lockdown measures in place and nothing to pass time, these streaming platforms have become a necessity. Without them, spending the day becomes arduous!

    Conclusion

    Every coin has two sides and the coronavirus outbreak is no exception. While a number of organizations and companies are reeling from decline in revenues and market value, others are profiting big time and witnessing a windfall hitherto unseen.