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Startups in pandemic days: a tale of despair and dreams
Sohel Parvez
It is the story of dreams and despair. Rise and fall. It is the story of anguish and cheer. For Bangladesh’s startups, all appear to be true.
The historic health crisis, shutdown of economic activities and subsequent downing of demand brought many startups to their knees, notably those focusing sectors such as travel, tourism and hospitality, ridesharing, electronics and automotive.
It forced downsizing, job cuts and even shutdowns, shattering dreams of many young entrepreneurs.
However, light continues to shine at the end of the tunnel, with the strength brought about with hope.
Startups operating in grocery and essential services, medicine, healthcare, digital-learning, logistics and financial technology services thrived on surging demand for delivery at doors, contactless payment, telemedicine and distance learning as the respiratory virus curbed face to face interactions and social gathering.
Dhaka Cast, Co-Space and Upskill are three glaring examples.
With the lockdown coming into effect at the end of March, online healthcare consultancy provider for diabetics Dhaka Cast and office space solution provider CoSpace saw their business going in the red in April and May.
Dhaka Cast, which began its journey in June 2019 to provide services to diabetic patients, later pivoted to telemedicine and branched out to provide consultancy and healthcare support to non-diabetic patients.
CoSpace, which had just launched a gigantic 6,500 square feet co-working space at one of the city’s posh location in Kemal Ataturk Avenue, Banani in January spending more than Tk 1 crore, had no alternative but to wait for the storm to calm.
As the lockdown forced office-goers to work from home since April and offices became deserted, CoSpace lost half of its 75 members in March, leaving the startup in a quandary on whether to continue to bear the very high operating expenses.
Answers started to emerge afterwards.
Since August, CoSapce began to receive queries in the form of quests by a section of firms, small entrepreneurs and even multinationals to shift to smaller office spaces to optimise operational costs as working from home became the new normal.
Today, it has 35 members.
“We suffered a lot. It is really a very bad situation when you see business going down, cannot bear expenses and pay salary properly. Now things are moving and demand is picking up gradually,” said Fahad Ibna Wahab, managing director of CoSpace Dhaka.
For him and Dhaka Cast Founder Dr Fahreen Hannan, the global pandemic opened a new horizon of opportunities, although the same rogue virus ravaged incomes, many businesses and destroyed dreams of a large number of their peers.
A study done by a business strategy consulting firm LightCastle Partners among 250 startups in Bangladesh found that the Covid-19 disruption left 60 per cent of startups with less than three months of runway.
One-fourth of them had to shut down operations and 30 percent of the startups reported a 50 per cent drop in their business, found the study.
To remain afloat in the turbulent waters, many startups downsized jobs, closed down offices and cut salary of employees in absence of funds and investments from local and international investors.
Some startups such as Dhaka Cast and Pathao pivoted to respond to the demand of time and to stay relevant.
Homegrown and popular ride-sharing service Pathao began delivering medicine and groceries in May as lockdowns restricted public movement.
Some 7 per cent witnessed an increase in business, said Bijon Islam, chief executive of LightCastle Partners.
“This was very interesting and good to see. We found that grocery, digital financial services and logistics saw a positive impact in business,” he said.
Bangladesh registered incredible growth in the startup ecosystem since its journey began in early 2010.
Today, there are 1,000-plus startups in the country and these have secured over $260 million in investments, mostly from global investors, showed data by LightCastle.
Startups have created 15 lakh direct and indirect jobs over the last seven years including among rideshare service providers and bicycle-riding delivery persons.
“Startups have a huge impact on employment,” said Islam.
Now as the economy reopens and business activities resume, things are recovering for startups.
E-commerce is expanding, demand for delivery of food and clothing is rising apart from grocery. People are also showing interest in consumer electronics, he said.
Education technology based startups offerings online learning are also becoming accepted.
Mustafizur R Khan, chief executive officer and founder of Upskill, said the online skill sharing platform saw an increase in demand for e-learning after the coronavirus hit the country.
“We had to rent-in office to do offline classes before the pandemic as it was not easy to get learners online,” he said.
“Things changed after the lockdown measures were put in place and the number of our users grew 200 per cent, revenue doubled last month compared to pre-Covid days,” said Khan.
Upskill decided to stop renting office space this month as demand for offline classes declined. However, not all were well placed to see a spike in demand. Deligram, an online shop, had to suspend operations, said market insiders.
Waiz Rahim, founder of Deligram, did not respond to a request for comment.
Fund flows have continued to stay dried out.
COLLECTED
From left , A free health check-up event organised by Dhaka Cast at EMK Centre in the capital. Shared space of CoSpace Dhaka where people from different organisations work individually.
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