Pandemic effect: Fading or going strong?

Fintech, Edtech, Healthtech- most trends that got people through the pandemic have lost their charm. WFH, however, continues to win hands down among employees

The unicorn-cockroach life cycle of a start-up may have been unthinkable till some time ago, but not any longer. An entrepreneur, who came into prominence recently for likening a start-up’s survival mantra to a cockroach in the midst of a funding winter, may have been thinking fintech, edtech, healthtech or whatever else powered by tech that had attained a godly status during the pandemic. Tessa Wijaya, co-founder of the Jakarta-based digital payments unicorn, Xendit, said at a tech event in Singapore that “it’s cockroach time, do whatever it takes to survive.” She’s sure to have many backers as the entire start-up universe looks shaky with investors’ single-minded focus on profitability after years of splurge.

Globally, fintech start-ups have been hit harder than other tech start-ups because they are directly exposed to the risk of recession, as The Economist wrote in its latest edition. Back home in India, the tech start-up fall coincides with a post-Covid consumption demand uptick and a chain of reversals across many areas, adding to the confusion.

For instance, edtech firms, a darling for all during the peak pandemic months and years, are struggling as target consumers are increasingly moving to the world of physical learning and coaching. 

Venture capital and private equity firms have been quick to pick up the signal and tighten their purse strings in this space. One of the largest edtech firms, funded by marquee investors, announced a large-scale layoff recently while calling it a move towards profitability. A round of fund-raise followed quickly enough at this edtech company, establishing the point that investors would loosen their purse strings only when start-ups are ready to fall in line and control expenses. The over $2-billion edtech market in India is said to have fired close to 7,000 employees already in 2022. The industry projection that Indian edtech was poised to be valued at $30 billion in 10 years would need a closer scrutiny now.

The next post-Covid reversal takes us to the world of entertainment. The OTT or over-the-top entertainment promised to bring a spark into our home-bound dreary lives during the pandemic. It did so in good measure. But some of the top OTT platforms lost traction rapidly as subscribers got out of the stay-at-home mood when malls, theatres, and well, offices reopened. It’s been a similar story with videoconferencing services that kept us going when nothing else was possible. The go-to meeting rooms of Zoom, Google Meet and Microsoft Teams across corporate and government offices saw a sharp dip with the declining Covid cases. After showing a stellar performance in 2020, the Zoom stock fell significantly. Recently, the company brought down its projections for 2023, upsetting the industry estimates. 

              

E-commerce, which had witnessed unprecedented growth during the peak of the pandemic, did see a drop in some categories when physical retail reopened fully, but overall the sector didn’t see any major reversal or upset. According to figures from Kantar Worldpanel, around 10.7 million households bought FMCG products online between April 2020 and March 2022. This is how the FMCG penetration rose online: In the one-year period that ended in April 2020, FMCG as a category in e-commerce stood at 3.6 per cent. A year later, the figure was 10 per cent, and then rose to 15.6 per cent for the 12-month period ended April 2022. The importance of grocery shopping on e-commerce was highlighted by an Adobe executive who was quoted in a Forbes report earlier this year. He said that e-commerce was being reshaped by grocery shopping—a category that sees much less discounting than electronics and apparel. The point was that speed and convenience were as important as discounts and cost-saving. Catching on to that trend, many e-commerce players announced superfast delivery of groceries soon enough.

With Covid-19 entering a dormant phase, at least for now, another prominent reversal is under process. This is around work from home or WFH, a three-letter word, again powered by tech, that everyone had warmed up to in no time. While many of the tech-powered tools used during the pandemic lost their big pull with the waning Covid numbers, WFH as a way of life and work continues to win hands down among employees, cutting across jobs and organisations. It’s true that a lot of employers have managed to bring their staff back to office despite stiff resistance, prompting real estate rejigs all over the place. But many more organisations are still trying to reverse the Covid way of working with little result. Is there a message there?