2020 has been a year that will be marked in red in the history of humanity. The reason being an invisible enemy that has enough power to take lives and bring the gears in the world’s economic engine to a complete standstill. However, it is not just the health of the human population that is at crossroads but our economic and financial outlooks too.
So for a start-up, this period is not only about surviving but also about altering their future goals and vision to adjust with the post- COVID-19 world. It seems that this pandemic will bring about a major change in the way we live, interact with each other and conduct our daily business.
While such changes may be permanent or temporary, there are a few probable effects that will affect the behaviour of private investors towards start-ups.
Travel and tourism: a major impact
The tourism industry and all other businesses associated with it has been one of the worst-hit by the pandemic. With international borders set to remain closed for a long time, many small tourism-based businesses are about to see dark days ahead. So for any start-up in this segment, attracting investors will be a tough task in the coming days.
Limelight is on e-commerce
With social distancing becoming a standard, malls and shopping complexes are likely to see fewer footfalls in the coming days. As customers are more likely to shift towards online shopping, businesses associated with e-commerce and related technology will attract more investors than segments like real estate. The same can be said about food delivery businesses which may emerge as the preferred choice for many customers. Consumers will grow wary of the ingredients that are being used to prepare their food, and hence players in this space will have to think about being more transparent to their customers. Allocating a portion of their marketing budget in emphasizing on the ingredients will indeed win them the “new loyalty” of the customers.
Home entertainment will get a boost
With all productions of movies and theatres being halted, it will be quite some time before people start visiting the silver screen again. Digital home entertainment services are moving in to fill this gap in a major way with a wide range of content. With the audience searching for better choices in the OTT space, more investment is likely to come towards this segment. This space will also witness emergence of new-age production houses catering to the needs of the new found audience in this space – the baby boomers.
Food habits
With a lot of stress being given on developing a healthy immune system for tackling COVID-19, healthier food options that are organic in nature will most likely witness a sales boost. Chances are that meat intake will reduce with more rise in the consumption of healthy vegan food products. So the investor’s money is more likely to follow that trend.
A rise in virtual office spaces
Many businesses may start operating through small teams located in different locations to avoid a total standstill. This will involve a rise in the use of technology to streamline communications and smooth data transfer. So investors are likely to be enthusiastic about brands that deliver virtual office setup support through the necessary technology.
Fintech advancements
Another effect of social distancing will be the rise in the use of digital money along with the necessary security advancements in that field. This may see blockchain and cryptocurrencies earning a positive response from the investors.While these are some of the areas that investors are likely to get traction, the scale of these changes will be clearer as we gradually emerge into the “next normal”.