What does a second lockdown mean for startups and the industry?

With the second wave of Covid 19, Indian citizens are concerned about a possible second lockdown. Several state governments have already issued partial lockdowns or curfew, but a complete lockdown may be on cards.

There have been several debates on the effects of the lockdown in the country. But this time, the industry is somewhat prepared for it. Talking to CiOL, Swati Babel, CEO, PrimaDollar India, states, "Not long ago when the whole World appreciated India in handling COVID-19. WHO also praised PM Modi. While everyone was expecting a V-shaped recovery from India, the recent surge in cases forced state governments to announce a second lockdown. Covid 19 and various lockdowns in India challenged standard routes of handling cross-border trades. But this did not impact the futuristic vision of PrimaDollar."

"Our product targets a huge gap between the payment and funding of international vendors; which only got highlighted more during the global crisis. Most Indian corporates were helplessly exposed to huge instability in production strategies, demand and supply mismatch, delays in timely deliveries of goods, etc. Corporates and banks are exploring strategic partnerships with fintech; to help create operational efficiencies and bring agility to the system. This whole covid situation encouraged us to fast track the development of our ongoing tech platform involving OCR, AI & ML technologies which substantially reduces time to execute a trade. This solution brings standardization in the end-to-end process."

"The first lockdown caught almost all of us unaware. It was only on the back of our agility and ability to respond to the customer’s changing needs and lifestyle, that we were able to get through the challenges thrown at us," states Vimal Sharma, Founder, and CEO, SMOOR. He adds, "This time, we are prepared in terms of business readiness. We have the ability to serve our customers in these extenuating circumstances. The larger focus has been to ensure that our team members are protected. We renewed our dedication to the vital staff that supports our businesses. To this end, we have taken additional Covid medical insurance to safeguard our employees and sourced medical supplies for emergencies. We continue focusing on ensuring the safety of our production and delivery teams."

"From an industry perspective, the expected reduction of consumer spends will lead to lower demand and may result in short-term losses, since certain expenses will persist. However, we continue to remain bullish on the long-term growth of our business," he further said.

Nitesh Salvi, Founder, and CEO, Pocket52 reiterated the idea. "The second lockdown, although undesirable, will have a positive impact on the gaming industry. Even right now, with people staying indoors, gaming is competing with major sources of entertainment like electronics and print. Gaming technology is constantly evolving and development does happen while coders are WFH; unlike say GEC where the artist is supposed to shoot at a given location. People have been able to taste RPG and multiplayer gaming. This has become easier to happen with the availability of superior bandwidth. We have been able to host tournaments with thousands of concurrent players; keep them entertained with real-time experiences including winning huge guaranteed prizes."

On a different note, Satyajeet Limaye, Chief Strategy Officer, BANKIT said, "With another lockdown just when companies were starting to get back on their feet after the first lockdown is tough on industries and organisations. BANKIT has been working to improve its technology to help more and more people reach and connect digitally to banking. The second lockdown also places a challenge on companies to take care of their employees. Every other employee has been affected by the virus directly or indirectly.

In the wellness space, Vishnu Saraf, Cofounder and CEO, Possible, said, "Nobody wants a lockdown, but these decisions are not in our hands. What is, is how we react to it and there is always a silver lining. We are in the wellness space and we help people eat healthily and boost their immunity, using superfoods. So, there is a tailwind in favour of our industry. Also, we are far better prepared now, comparatively. We have become stronger with each obstacle faced. We have to think harder to be leaner, keeping fixed costs low. There is no better way to do business than to focus on your existing customers. More than half our revenue comes from referrals. We are working towards making it 70%, hence reducing dependence on marketing significantly."

Amit Ratanpal, Founder and MD at BLinC Invest states, "We have been talking to the founders daily. One of the assessments is understanding the chemistry of the founders and each other social. I think that this can be best done during a face-to-face meeting. Every company builds its own culture and a social environment where everyone connects. I think the human element is missing during this period. The uncertainty caused by the second lockdown will affect the risk appetite of the investors and slow down the investment activities. However, it will further accelerate the adoption of technology, innovation and digital transformation. This, as a result, will help in reducing cost and improving customer experience."

Sandeep Wirkhare, MD and CEO, ISFC, supports the idea of a second lockdown. "I think we have a very high capacity to understand now how much lockdown as a tool has worked in the past and how effective it will be in future too. This though is a prerogative of governments and leave it to their good judgement. Having said that, like the previous wave and lockdown Indian ecosystem is robust enough to come back on track very fast. Despite a one-year-long issue in school fee collection, we saw a tremendous comeback in the last quarter of the financial year. We have recovered from a long phase and this smaller one shall also pass," he says.

"The lending industry, which has a wider digital presence," said Rohit Garg, Co-Founder and CEO, Smartcoin Financials. "It has a bigger advantage as they have a direct user interface. As a policy to help in fighting these tough times, we do not charge huge penalties or late fee charges from our customers. With the mechanism of early warning signals, we can control our disbursal upfront. This ensures that even if there are slight delays in collections, there should not be any liquidity issues. In today’s digital world, in case of a lockdown, firms can extend the support by staying connected via various web tools. These include chats, messages and aid any additional help that these borrowers need. With the current times, we anticipate that traditional NBFCs will be adapting to this new normal; explore more tech solutions for loan management and ensuring seamless remote working."

Edtechs have a different story altogether. Amit Agrawal, Founder, OckyPocky states, "The second lockdown in the country comes at a time when most of the schools were about to get ope. Students were waiting either for their final exams, results, or joining a new session. The physical classrooms again moved back to tech-infused interactive digital classes. It seems like that the technology in classrooms is here to stay now. The pandemic-induced lockdowns gave an immense rise to the Edtech industry and we saw a significant push to the sector in India."

"Additionally, the boom of the Edtech segment in India became possible due to the capacity to cater to a larger audience at lower costs compared to traditional classroom learning. There has also been advancement in the internet facilities and infiltration of Smartphones across India. I believe that technology is going to have a major impact on the way we educate our students soon. This new wave will further cement Tier-2 penetration of the Internet-based solutions. Thus, it will allow a huge expansion of late adopters to come up on board in a big way," he concluded.

Summing Up!

India has been reeling under the second wave of the coronavirus pandemic. This has left several people scrambling for medical emergencies. Further, the weekend lockdowns and curfews already have impacted businesses. In case we go under a second lockdown, it will be very difficult for business. Some businesses are ready, while for some, it may be very very difficult.