Pandemic puts the squeeze on tech startups: Report

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GrabFood delivery riders in Singapore on April 20.
APRIL 21, 2020 - 8:17 PM

SOME tech startups are bleeding heavily across the region, despite the coronavirus pandemic’s lift to segments like e-commerce and tele-health.

Citing a plunge in online searches for short-term letting platform Airbnb in Singapore, Malaysia, Thailand, Indonesia and the Philippines, Maybank Kim Eng economists wrote: “The ‘sharing economy’, such as home sharing and co-working space, has been severely impacted.”

Ride-hailing firms pivoting from private-hire rides to food and logistics delivery, but the analysts added that South-east Asian market leaders Grab and Gojek “are burning cash to maintain their fleet, at a time when venture capital is freezing”.

The rival firms have both set aside millions of dollars in relief measures for infected, quarantined and otherwise affected drivers.

Meanwhile, co-working spaces were highlighted by the Maybank Kim Eng analysts as another tech-based “sharing” industry that could flop as tenants stop paying or try to pull out of their leases.

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Christine Li, real estate consultancy Cushman & Wakefield’s regional research head, noted earlier in April that co-working take-up is already flat as remote working and staggered work hours “reduced the immediate demand for new space” in the prime office market in Singapore.

Still, the Maybank Kim Eng analysts said that lockdowns adopted to curb the spread of the deadly virus “will likely increase e-commerce penetration in Asean, similar to how the Sars episode in 2003 was a turning point for China e-commerce giants Alibaba and JD.com”.