How lockdown impacted the startup world: 5 biggest winners and 5 biggest losers
With companies experiencing lockdown consequences, many have suspended hiring, reduced salaries, and laid off people. But even though Coronavirus put many businesses in the process of closing down, there are some startups that only gained a boost. Can we say there are positives of how lockdown impacted the startup world? Let’s have a look at the 5 biggest winners and 5 biggest losers of the startup industry.
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 more likely to save money to pay their rent and food than to go to a beauty salon. If hairdressers and beauticians do not work, appointment platforms also lose. 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 Germany startup that’s one of Europe’s biggest online platforms for booking tours and attractions. The number of bookings went down 50% in February and was decreasing even further as the pandemic continued. The CEO of the startup said the company will use the recent investment as their cushion in the coming months. All the hope is put in the big coming back of the tourism industry.
The Austria-based startup which specializes in multiday tours also experienced a decrease in the revenues. The tours are typically booked 3 to 12 months out from the departure date so at first, the company didn’t see any changes in the number of trips. As the pandemic continued, people started to get nervous about the money spent on the tours which led to a chain of cancellations on the TourRadar booking platform. The startup decided to implement a “credit for future tours” feature that was 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 withstand 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. The unexpected decision was to offer customers cancellation of any pre-lockdown booking made for stays up until May 31. The decision wasn’t good for the hosts who thought the cancelation policies they agreed on will still apply. However, simply due to the size and global reach, Airbnb will likely survive the crisis.
Bla Bla Car
As countries close their borders and locals avoiding shared transport, transport booking services have also decreased in popularity. Among companies that experienced a severe decrease in customer bookings are Omio or Wanderio but also France-based startup – Bla Bla Car. Bla Bla Car experienced a downfall in activity across its Western European markets. The drop was found to be most seen across long-distance car and bus services. People still prefer carpooling than traveling by train or by bus that’s why the company has a chance to survive the lockdown.
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 the holy grail of the company as the services experienced high customer demand in mid-March with 89% bookings growth in April. Uber carefully selected the countries in which the food delivery services were unprofitable for the company and closed the 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.
Doctor on-demand apps are those that 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 an increase in app downloads up to 61%. 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 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 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 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. It’s the third one in a row, a successful digital healthcare app that shows it’s not just a trend. Dr on-demand online services will remain our new way to consult our health 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 been used to host virtual classrooms or 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. Although, it’s worth mentioning the series of security issues the company had to fight with on the road to success.
There are ways in which the lockdown impacted the startup world that are undoubtedly harmful to the industry. The crisis, however, showed which companies have a stronger team on board and better startup marketing strategy. The ultimate startup test distinguished those startups with the most successful business model and those where the business objective needs to be reshaped. How to reshape the business to survive?
Read our article on how can startups survive Coronavirus pandemic.