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With companies experiencing lockdown consequences, many have suspended hiring, reduced salaries, and laid off people. But even though the Coronavirus may have brought many businesses to the brink of closure, there are some startups that only gained. Are you interested in how lockdown impacted the startup world? Let’s have a look at the 5 biggest winners and 5 biggest losers of the startup industry!
Companies that have suffered losses.
The platform for scheduling beauty treatments and hairdressing services – for sure – has its place among startup losers! Beauty services were suspended during the Coronavirus pandemic and customers were much more likely to save money to pay their rent and food than to go to a beauty salon. Of course, if hairdressers and beauticians do not work, appointment platforms also lose money. At first the company decided to lower the subscription costs by 50%, but it didn’t help much. Hairdressing salons began massively giving up cooperation with the platform. At Booksy, decisions were made to release half of the company team due to the lack of revenues.
Tourism platforms are next on the list. GetYourGuide is a German startup that’s one of Europe’s biggest online platforms for booking tours and attractions. The number of bookings went down 50% in February alone, and it decreased even further as the pandemic continued. The CEO of the startup said that the company will use recent investments as their cushion in the coming months. All the hope is put in the big bounce-back of the tourism industry!
The Austria-based startup which specializes in multiday tours also experienced a decrease in revenues. The tours are typically booked 3 to 12 months before the departure date, so at first the company didn’t see any changes in the number of trips. But as the pandemic continued, people started to get nervous about the unnecessary money spent on tours, which led to a chain of cancellations on the TourRadar booking platform. The startup decided to implement a “credit for future tours” feature to encourage people not to cancel their trips.
Airbnb is another booking platform that has seen a drop in bookings by 50 – 90% depending on the area! To reduce the lockdown impact on the startup world and the home-sharing market, the startup has reportedly suspended its marketing strategy. Airbnb put its founders’ salaries on hold and reduced the salaries of top executives by half. An unexpected decision the company made was to offer customers free cancellation of any pre-lockdown booking made for stays until May 31. The decision wasn’t good for the hosts, who thought the cancelation policies they agreed on won’t be changed haphazardly. However, simply due to the size and global reach, Airbnb will likely survive the crisis.
As countries close their borders and locals avoid shared transport, transport booking services have also decreased in popularity. Among companies that experienced a severe decrease in customer bookings are ‘Omio’ or ‘Wanderio’, and also the France-based startup – BlaBlaCar. BlaBlaCar experienced a downfall in activity across its Western European markets. The drop was found across long-distance car and bus services. But because people still prefer carpooling than traveling by train or by bus, that’s why the company still has a chance to survive the lockdown!
Companies that gained through the pandemic.
On the other hand, we have a transport booking startup that was already on the loser list until a sudden increase in its food delivery services! Uber Eats is now the holy grail of the company, as the services experienced high customer demand in mid-March and an 89% bookings growth in April. Uber then carefully chose countries in which the food delivery services were unprofitable for the company, and hence closed services in eight markets. The company claims to have a tremendous increase in restaurant sign-ups that led them to target the services even better. Being one of the world’s biggest companies, it is likely that Uber shall survive the pandemic in some-or-the-other form.
Doctor on-demand apps happen to be one of the most successful during the Covid-19 pandemic. Kry is a startup from Sweden that provides services in Sweden, Norway, Spain, and France. It is the most downloaded Doctor on-demand app in Europe, and in times of crisis, it experienced up to 61% increase in app downloads! What’s more, the consultations raised by 80% in comparison to the previous year! The startup marketing strategy also expanded as the company launched new products, including a free Coronavirus symptom checker. The move was possibly inspired by Apple and Google Covid-19 tracing tool.
Another smart example of a digital healthcare solution is Babylon. In the absence of GPs who are occupied by the number of Covid-19 victims, Babylon has gained a lot of followers. The UK startup is a Covid-19 Care Assistant app that helps to ease the impact of staff absence. Coronavirus patients can now have 24/7 access to monitoring services that help them check symptoms, track their status, and consult with GPs and clinicians by video. Considering it is a free option and a way to support the NHS forces, Babylon is a startup that shows how to effectively use $550M of investment.
Qare is a Paris-based startup providing teleconsultations with doctors. The pandemic caused a 25% increase in the Qare services, even though the platform was already popular before the Coronavirus! The chief executive of the company said the team had to scale up the operations to provide faster services and tutorials for health practitioners. Apart from Babylon and Kry, it’s another successful digital healthcare app! It means that it’s not just a trend and Dr on-demand online services will remain our new way to consult with GPs.
The whole world has been forced to work from home. That’s why businesses like Zoom are thriving! Zoom is a remote meet-up solution offering video conferencing. Apart from work meetings, the app has even been used to host virtual classrooms and church services! Zoom allows users to talk to up to 99 other people simultaneously, and since the pandemic, the estimated net worth of its founder has increased by more than $4bn. On 23 March – the day the lockdown was announced in the UK, Zoom was downloaded 2.13m times around the world. It’s also worth mentioning that the company had to fight with a series of security issues, and thank god that it prevailed! The world is a slightly better place because of Zoom, and definitely one with more connections!
There are many ways in which the lockdown impacted the startup world that are undoubtedly very harmful to the industry. The crisis, however, showed which companies have a stronger team, one that is ready to respond to sudden changes to the market. This ultimate startup test distinguished those startups with the most successful business models from those where the business objective needs to be reshaped.
How to reshape the business to survive?
Read our article on how can startups survive the Coronavirus pandemic!