Express Computer reached out to several VCs, to gain an understanding of how tech startups have been faring amid such unprecedented times. While there have been a lot of updates and news stories on startups hustling, and some of them even have managed to fetch a huge amount of funding that have helped them earn the title of ‘unicorn’, the latest example that can be cited is that of Bengaluru and San Francisco-based ‘Postman that has literally changed the funding scenario for the startup ecosystem.
Ankur Mittal, co-founder Inflection point Ventures, one of India’s most active angel platform gives us a clear understanding.
How do you think have tech startups been faring in the pandemic?
As the pandemic started in India, tech startups were drawing plans to scale up, hire more talent, raise bigger rounds and command stronger valuations. But within weeks of lockdown, a new image started to emerge. There is no denying that some verticals within the tech startup community have seen healthy traction, it has also resulted in many businesses launching pertinent ideas directly impacting the lives of people during the COVID outbreak.
The fact that startups are so nimble and agile to turn a business idea around so quickly establishes the fact that tech plays a strong role in helping these companies reach the market faster.
In our view, startups in sectors like health tech, Ed-tech, e-pharmacies, telemedicine, online fitness, and OTT have done quite well. The pandemic accelerated customers’ acceptance of these pure digital business ideas resulting in revenues and even investors’ attention. For eg. Ed-tech sector surged up to 3 times during the lockdown period, when most adopted to online education. Similarly, health-tech, as well as e-pharmacy, have picked up quite well, facilitating virtual health solutions and contact-less delivery, along with nanotechnology, medical engineering, Artificial Intelligence and Machine Learning.Having said that, every startup, however, established it is, has faced roadblocks during the pandemic. Talking about travel-tech, the sector has come to a standstill, but definitely technology has helped the creative minds come up with innovative solutions, catering to needs of the public. There is a gradual shift taking place in the Indian startup ecosystem and probably it will bring a remarkable change in the startup arena, even post lockdown.
Is there a reason to worry for them?
Every startup needs to be aware of all opportunities and possibilities. These are indeed difficult times, but we need to remind ourselves of how Uber and Airbnb were launched post the 2008 global financial crisis. More than 70% of the startups in the country have been affected by the pandemic. As a recent FICCI survey reveals, investors of around 33% startups have put their funding decision on hold, making the situation more alarming, but on the other hand, there are investors who are ready to back innovative ideas by nimble founders, who have turned this situation into an opportunity. The pandemic is certainly a situation for all to pull up their socks, with over 30% startups planning to lay off their employees if the lockdown extends. As times have changed, it has become more difficult for startups to raise funds. Also, they will have to make more efforts to keep their clients to themselves, as many corporate businesses will have to cut on discretionary spends, implying less business for the startups.Startups in IPV’s portfolio like Syook, Intugine and GeoIQ have shown tremendous resilience in fighting the current pandemic and brought new products solutions specific to COVID-19. For many, there have been instances where the revenues have come to an abrupt halt, but they played their game well by altering business models, finding ways to optimize resources and conserve cash. These are valuable lessons and will help the startups and founders as they scale their businesses. One needs to envision the bigger goal, irrespective of the obstacles faced during the journey, and even historically, recession has helped build some of the biggest companies in the world. This pandemic might also trigger the hidden perseverance and talents in many.
How is IPV coming to their aid?
IPV has always been on a look-out for startups, diligently identifying them. Particularly during this point of time, investing in startups helps them with sufficient fundsfor the next 12-18 months, aiding them in building the system around their ideas and providing adequate infrastructure to scale up. For already funded startups, IPV ensures it connects with them regularly, mentoring and advising them on rationalisation plans, expanding network and identifying revenue opportunities inside and outside of IPV’s huge investor base.Cross-selling among different companies is a suggestion. IPV also reached out to leading finance organisations so as to help the startups with business loans, along with connecting to CEOs and CHROs to help the startup founders on human capital management.Also, IPV recently organised a virtual show for potential Indian investors looking to invest in the US market, helping one of its funded startups in its business growth goals. So, with IPV, it’s always a 360-degree association with the startups.
Since the lockdown began in March this year, IPV has invested over Rs 20 crore in 9 startups.
What do you think is the greatest comeback tech startups can have at this stage?
There is a lot of scope for technology to seep in and it is where the brilliant minds can tap the opportunity. These times have made us think differently, giving birth to newer ideas. This is the best time for tech startups to prove their mettle, to come back with excellent ideas, and even better execution plans in a cost-efficient environment. This is the time when technology will be absorbed by everyone. E.g. An estimated number of 5000 health-tech startups in the country are helping Government, directly and indirectly, fight the pandemic, leveraging the technology at hand. Also, with work-from-home becoming the new normal now, there is a vast market for performance/evaluation tools, video meet-ups and improving workforce productivity. In similar lines, Virtual Assistant Services are high in demand all over the world, especially in the US market, facilitating remote work environments. One of IPV investee companies, Wishup helps with virtual assistants, trained in over 50 tasks in-house to assist the employees and employers with nearly every professional help. Such ideas can help every startup become relevant.
How do you think is it essential to upskill and reskill for startups?
Every startup needs to keep up with the trend and with evolving times, it becomes crucial to evolve along with it. Collaborative learning and upskilling have become relevant now. If a certain idea/skill doesn’t work out the best, we necessarily need to start all over again. The imbalance created in the ecosystem due to mismatch of talent supply and demand needs to be addressed. Also, as the current situation demands launch of new business models, one needs to build relevant skills, in line with the new models. Critical skill gaps need to be closed. Agile learning techniques need to adopted. Remote micro-learning is the key in these times, and with technology becoming the future itself, conventional learning will gradually take a backseat. With a learner-centric approach, every startup founder needs to start afresh.