As the COVID-19 pandemic and the ensuing lockdown brings businesses to a halt, it is time for the global startup community to take up roles to support and learn from each other. Startups and SMEs are usually the hardest hit during an economic downturn, and the impact of COVID-19 has been no different. Bangladesh and Pakistan, being the home to an array of emerging startups, have been gravely affected by the ongoing crisis.
While the nature of the impact is evident, reliable data on the impact and mitigation plans are challenging to come by. However, LightCastle Partners and Invest2Innovate have both taken up the initiative to conduct market studies in their respective countries to capture data to gauge the impact of coronavirus on the startup ecosystem.
The organizations came together in a virtual session to deep dive into the collected data. They brought forth discussions around what startups should do to navigate through this period, governments’ role, and the different spaces for opportunities to thrive in the post-COVID era.
The discussion panel consisted of research analysts, founders, and institutional investors from both countries, represented by:
“This great lockdown has propelled the digital transformation that we needed for a long time, and I hope this doesn’t go back to where it was after the pandemic”
– Ambareen Baig, Research Lead at Invest2Innovate, PK
The scenario of Pakistan’s Startup Ecosystem
I2I conducted a study on 101 startups to capture the impact of a 30-day lockdown, and shared the following findings:
“We must realize that we’re all in this together. We can’t afford to think only about us, but we have to think about all the other startups in the ecosystem. The relationships that we make during this time – these are the relationships that we take into the post-COVID world.“
– Bijon Islam, CEO & Co-founder at LightCastle Partners
The Scenario of Bangladesh’s Startup Ecosystem
A survey conducted by LightCastle Partners on 200+ startups in early April in collaboration with Bangladesh Startup COVID-19 Response Group revealed the following findings:
Considering the gravity of the situation and the investor’s sentiments, startups should put significant emphasis on sustainability and profitability rather than scalability. In addition, they should Seek support from impact-based funds such as Biniyog Briddhi, Youth Co:Lab, Internet Society Foundation, and DFID.
“If nothing is done, the startup ecosystem of Bangladesh is going to rewind back by five years. But to come back to where we are now, it will take way longer than five years, which we can’t afford.”
– Tina Jabeen, Investment Advisor at Startup Bangladesh
The Way Forward
Amidst all the negative impacts on the economy, certain positive aspects are coming to life – consumers are increasingly adopting digital services like online education, virtual healthcare, cashless payments, and e-groceries. Working from home is becoming the new norm, and subsequently, individuals are becoming tech-savvy through the usage of various co-working tools such as Slack, Monday, and Zoom.
In the post-COVID, businesses will have the opportunity to leverage the digital space and design products and features to enhance their services further, as mentioned earlier. While services like virtual education and healthcare are limited to the urban demographics, with the digital transformation, such services are expected to be widely available to rural regions as well.
“Startups need to latch on to any sort of potential business where your employees or partners do not go hungry”
–Muneeb Maayr, Founder at Bykea
What Should the Startups Do Now?
The startups that can survive the upheaval are most likely to have the upper hand once the revival begins. Since investors would not be willing to reward top-line growth unless it is of high quality, startups are suggested to capitalize on several things:
“This is really an opportunity where the winners emerge – in terms of people who are adaptive and who think on their feet because that is what the environment is calling for”
–Kalsoom Lakhani, CEO & Founder at Invest2Innovate
To conclude, now is the time for startups to do the research, utilize the time pivot to business models, which are going to be valuable for humanity, and come out of the pandemic as winners.
The virtual session had over a hundred participants from Bangladesh, Pakistan, and other countries. To participate in our coming virtual sessions, sign up here.
This article was written by Mehad ul Haque, Senior Business Consultant, and Ishtiak Mourshed, Trainee Consultant from LightCastle Partners. For any queries, you can reach out at [email protected].
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