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1
Report: Economic
ImpactCOVID-19 in Startups
2
Why do we
do it?
The crisis caused by the coronavirus has put all
sectors and areas of society on alert. In this new world,
startups have the agility and creativity to respond quickly
and positively to this crisis. They are also among the first to
have to take measures to survive in a world of challenges,
opportunities and risks.
In this study we analyze how the coronavirus crisis is
impacting our portfolio of more than 500 startups and the
entrepreneurial ecosystems in which we have a presence
in Europe and Latin America. Today, more than ever,
innovation does not stop.
#WeStayConected
3
Methodolo
gy
File Universe: survey done in more tan 9 countries to more than
500 startups in our global Wayra and Open Future portfolio.
Number of answers: 214.​
Countries: Germany, Argentina, Brazil, Colombia, Chile,
Spain, Perú, México y UK.​
Period of time: the survey was open between April 1st and 3rd
4
Main Data
EconomicalImpact Report by COVID19 in Startups
5
The Covid-19 crisis is negatively impacting most startups (74%), regardless of the
geography where theydo business.
However, one in four startups (26%) considers this situation
to be positive for their business due to the acceleration in
the digitization process
57% of startups look to the future with optimism. They
consider that once the crisis is over, their activity will return
to normal
However, many also agree that investment in innovative
solutions and proof of concept (PoC) will be affected in the
short term.
Impact in
startups
.
6
More benfited:
Impacted
Sectors
More afected:
An acceleration is expected in the digitization of payments in Latam and in the digitization of small and medium-
sized companies. Greater adoption of digital service channels and growth of products that make the use of the cloud
more efficient arealso expected.
• Edtech
• Fintech
• eHealth
• Teletworking
• Logistics & e-
commerce
• Video
• Cloud Solutions
• Devices (renovation of
the technological park)
Cybersecurity
• Geolocalization &
traceability
• Robotics & industrial
automatization
• Telecomunications
• Virtual Reallity
• Travel
• Retail
• Home services
• B2B Products that
require the closing of the
sale in person
7
What
worries
startups
the most
1. The decrease in commercial activity
(43%)
2. The suspension of payments (17%)
3. The lost of clients (11%)
8
Answer to
the crisis There is greater concern about trying
to alleviate the effects of the crisis with
contingency plans in European
startups (66%) compared to Latin
America (34%), perhaps due to an
earlier and more severe extension of
the pandemic in Europe.
9
Liquidity The founders expect sharp falls in the income of their startups
, 29% believe that their income will fall more than 50%
with respect to expectations, and a greater difficulty in
financing in the coming months, so that liquidity management
it is the number one priority.
The most frequently adopted measures to manage liquidity are
• reducing operating costs
• reducing the number of employees
• reducing marketing investment
However, 72% of startups plan to maintain or increase
their number of employees despite this situation in the
next three months.
10
Retention
Most of the startups (60%) have
implemented customer retention
plans (discounts for annual
payment, cancellations if cost to
clients, among others).
11
Situations
with the
greatest
risk
The businesses that face a higher risk are those that the
crisis finds them actively seeking investment (54%).
20% of the startups consider that they will not survive if
the crisis lasts more than 3 monthS.
Because of this crisis, 5.6% think that their activity will
cease immediately.
12
Team
Managemet
All startups have implemented teleworking and 85% declare that they have done so
normallyand without affecting the dynamics of their business.
In some cases, it is considered to maintain telework
permanently, beyond the crisis.
Actions to generate commitment and loyalty of the team
are highlighted. Transparency with the team when
communicating plans and adopting measures that facilitate the
balance of work and personal life.
Some founders highlight the opportunity to access quality
talent.
Less than 20% propose layoffs and 9% foresee reductions
in working hours.
13
Responsability
to face Covid-
19
59% of startups are leading actions aimed at generating a
positive impact on society during the crisis.
The most repeated actions have to do with developing
and opening free content or providing licenses for
health centers and affected sectors.
14
We can highlight
some initiatives
like:
Production of
sanitary material
with 3D printers (4
startups)
Free transportation
for healthcare
workers (3
startups)
Development of an app
with the government for
testing or traceability of
healthcare employees
(3 startups)
Helps provide field
hospitals with Wi-Fi
Technological
support to
hospitals
Collaboration in a
project to
manufacture rapid
tests
Development of a
system for ozone
disinfection
Help reskilling staff
subject to layoffs
Red Cross
volunteer during
the crisis
Support to
Geovoluntarios.org
Delivery of
medicines and
food to prevent
older people from
leaving their
homes
Data technology
and prediction put
at the service of
governments and
health centers
Development of e-
commerce for the
food market during
the crisis
Support to schools
to offer classes
remotely
Repair of devices with
diagnosis and free
transport so that they
do not leave their
homes
Support to other
startups among
other initiatives..
16
Which is
your sector?
Tourism
1.
LifestyleTransportatio
n
Cloud GamingEhealth LogisticsEcommerce Music
Video/Culture
Cyberseg.Education/
e-learning
Others Smart
Home
Fintech Business
Services
1,1% 1,1%
2,1%
3,7% 3,7%
4,8% 4,8% 4,8%
6,4% 6,4%
7%
8,6%
9,6%
12,8%
23%
17
Based on your business activity, what
situation are you more worried about?
43%
12%
17%
9%
11%
9%
2.
Fall of commercial activity
Client lost – Actual business lines
Suspension of payments/insolvency
Difficulty of access to financing or credit lines
Financing rounds postponement
Other
18
In general, what
kind of impact
has the
coronavirus had
to your
company?
Positive
Negative
3.
26%
74%
1out of 4startus considers that this situation
is affecting its business ina positive way
19
How much
impact has had
the crisis to your
billing/activity in
March 2020?
4.
None
Increase a 10%
Increase between 10% and 20%
Increase between 20% and 50%
Increase more than 50%
37%
20%
13%
15%
15%
Impact onstartups that declare havinghad a
positive impact on their business
None
Increasea10%
Increasebetween10%and20%
Increasebetween20%and50%
Increasemorethan50%
20
What impactdo you
estimate in the 2020
income vs. your annual
budget?
5.
23%22%
20%
18%
17%
Impact onstartups that declare havinghad a
positive impact on their business
21
23,2%
9,2%
8,5%
18,3%
31%
9,9%
How much impact has had the crisis to your
billing/activity in March 2020?
6.
None
Decrease more than 10%
Decrease between 10% and 20%
Decrease between 20% and 50%
Decrease more than 50%
End of activity
Impact onstartups that declare havinghad a negative
impact ontheir business
22
4,2%
6,3%
20,4%
34,5%
28,9%
5,6%
What impact do you estimate in the 2020
income vs. your annual budget?
7.
None
Decrease less than 10%
Decrease between 10% and 20%
Decrease between 20% and 50%
Decrease more than 50%
End of activity
Impact onstartups that declare havinghad a negative
impact ontheir business
23
How long your
business could
stand if the
situations
continues this
way?
8.
1 month
2 - 3 months
Less than 6 months
Less than 9 months
Less than 12
months
More than 1 year
5,6%
19,7%
23,9%
14,8%
14,1%
21,8%
20% of the startups consider
that they will not survive if
the crisis lasts more than 3
months
24
In the next 3
months, how is
going to evolve your
number of
employees?
10.
Increase
Stands
We will do work time redutions
We will do temporary dismissals
We will do permanent dismissals
20%
9%
52%
8%
11%
72% of startups plan to
maintain or increase their
number of employees in the
next three months.
25
Do you have a
Contingency
Plan?
11.
Yes, we have implemented it
We are working on it
No
60%
30%
10%
60% of startups have already
implemented a contingency
plan
26
42,2%
12,3%
8,6%
5,9%
13,4%
5,3%
2,7%
9,2%
Are any of this actions part of your
Contingency Plan?
12.
Reduce operational costs
Reduce marketing investment
Delay or suspend supplier payments
Reduce working-day time
Reduce the number of employees
Change activities or process
Remote working
Others
27
Are you looking
for financing?
13.
Yes
No
54%
46%
54% of startups are actively
seeking financing
28
0,7%
16,3%
15,9%
10,2%
18,4%
17%
18%
3,5%
Stands out
public aid
(18.4%), loans
(17%) and
grants (18%)
What kind of financing are you looking for to
overcome the crisis?
14.
I am not looking for funding
Investment round with VCs
Business Angels
Payment delay
State Aids
Loans
Grants
Others
29
Value the
teleworking
implementation
success.
15.
Average score 4.42
85% of the startups have
successfully implemented
teleworking and without
affecting the dynamics of their
business
30
Are you
carrying out a
retention client
plan?
16.
Yes
No
60%
40%
60% of the startups have
implemented customer
retention plans
31
What future
perspectives do you
have for your sector
after the crisis?
17.
57%
34%
9%
Optimistic perspective
Negative perspective
Don’t Know
57% of startups look to the
future with optimism
32
Have you taken any
action that generates a
positive impact in this
crisis?
18.
Un 59% de los
fundadores está
embarcado
en acciones orientadas
a generar un impacto
positivo en la
sociedad durante la
crisis.
59%
41%
Yes
No
59% of startups are leading
actions with a positive
impact on society
Economic impact of covid 19 on wayra startups

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Economic impact of covid 19 on wayra startups

  • 2. 2 Why do we do it? The crisis caused by the coronavirus has put all sectors and areas of society on alert. In this new world, startups have the agility and creativity to respond quickly and positively to this crisis. They are also among the first to have to take measures to survive in a world of challenges, opportunities and risks. In this study we analyze how the coronavirus crisis is impacting our portfolio of more than 500 startups and the entrepreneurial ecosystems in which we have a presence in Europe and Latin America. Today, more than ever, innovation does not stop. #WeStayConected
  • 3. 3 Methodolo gy File Universe: survey done in more tan 9 countries to more than 500 startups in our global Wayra and Open Future portfolio. Number of answers: 214.​ Countries: Germany, Argentina, Brazil, Colombia, Chile, Spain, Perú, México y UK.​ Period of time: the survey was open between April 1st and 3rd
  • 4. 4 Main Data EconomicalImpact Report by COVID19 in Startups
  • 5. 5 The Covid-19 crisis is negatively impacting most startups (74%), regardless of the geography where theydo business. However, one in four startups (26%) considers this situation to be positive for their business due to the acceleration in the digitization process 57% of startups look to the future with optimism. They consider that once the crisis is over, their activity will return to normal However, many also agree that investment in innovative solutions and proof of concept (PoC) will be affected in the short term. Impact in startups .
  • 6. 6 More benfited: Impacted Sectors More afected: An acceleration is expected in the digitization of payments in Latam and in the digitization of small and medium- sized companies. Greater adoption of digital service channels and growth of products that make the use of the cloud more efficient arealso expected. • Edtech • Fintech • eHealth • Teletworking • Logistics & e- commerce • Video • Cloud Solutions • Devices (renovation of the technological park) Cybersecurity • Geolocalization & traceability • Robotics & industrial automatization • Telecomunications • Virtual Reallity • Travel • Retail • Home services • B2B Products that require the closing of the sale in person
  • 7. 7 What worries startups the most 1. The decrease in commercial activity (43%) 2. The suspension of payments (17%) 3. The lost of clients (11%)
  • 8. 8 Answer to the crisis There is greater concern about trying to alleviate the effects of the crisis with contingency plans in European startups (66%) compared to Latin America (34%), perhaps due to an earlier and more severe extension of the pandemic in Europe.
  • 9. 9 Liquidity The founders expect sharp falls in the income of their startups , 29% believe that their income will fall more than 50% with respect to expectations, and a greater difficulty in financing in the coming months, so that liquidity management it is the number one priority. The most frequently adopted measures to manage liquidity are • reducing operating costs • reducing the number of employees • reducing marketing investment However, 72% of startups plan to maintain or increase their number of employees despite this situation in the next three months.
  • 10. 10 Retention Most of the startups (60%) have implemented customer retention plans (discounts for annual payment, cancellations if cost to clients, among others).
  • 11. 11 Situations with the greatest risk The businesses that face a higher risk are those that the crisis finds them actively seeking investment (54%). 20% of the startups consider that they will not survive if the crisis lasts more than 3 monthS. Because of this crisis, 5.6% think that their activity will cease immediately.
  • 12. 12 Team Managemet All startups have implemented teleworking and 85% declare that they have done so normallyand without affecting the dynamics of their business. In some cases, it is considered to maintain telework permanently, beyond the crisis. Actions to generate commitment and loyalty of the team are highlighted. Transparency with the team when communicating plans and adopting measures that facilitate the balance of work and personal life. Some founders highlight the opportunity to access quality talent. Less than 20% propose layoffs and 9% foresee reductions in working hours.
  • 13. 13 Responsability to face Covid- 19 59% of startups are leading actions aimed at generating a positive impact on society during the crisis. The most repeated actions have to do with developing and opening free content or providing licenses for health centers and affected sectors.
  • 14. 14 We can highlight some initiatives like: Production of sanitary material with 3D printers (4 startups) Free transportation for healthcare workers (3 startups) Development of an app with the government for testing or traceability of healthcare employees (3 startups) Helps provide field hospitals with Wi-Fi Technological support to hospitals Collaboration in a project to manufacture rapid tests Development of a system for ozone disinfection Help reskilling staff subject to layoffs Red Cross volunteer during the crisis Support to Geovoluntarios.org Delivery of medicines and food to prevent older people from leaving their homes Data technology and prediction put at the service of governments and health centers Development of e- commerce for the food market during the crisis Support to schools to offer classes remotely Repair of devices with diagnosis and free transport so that they do not leave their homes Support to other startups among other initiatives..
  • 15. 16 Which is your sector? Tourism 1. LifestyleTransportatio n Cloud GamingEhealth LogisticsEcommerce Music Video/Culture Cyberseg.Education/ e-learning Others Smart Home Fintech Business Services 1,1% 1,1% 2,1% 3,7% 3,7% 4,8% 4,8% 4,8% 6,4% 6,4% 7% 8,6% 9,6% 12,8% 23%
  • 16. 17 Based on your business activity, what situation are you more worried about? 43% 12% 17% 9% 11% 9% 2. Fall of commercial activity Client lost – Actual business lines Suspension of payments/insolvency Difficulty of access to financing or credit lines Financing rounds postponement Other
  • 17. 18 In general, what kind of impact has the coronavirus had to your company? Positive Negative 3. 26% 74% 1out of 4startus considers that this situation is affecting its business ina positive way
  • 18. 19 How much impact has had the crisis to your billing/activity in March 2020? 4. None Increase a 10% Increase between 10% and 20% Increase between 20% and 50% Increase more than 50% 37% 20% 13% 15% 15% Impact onstartups that declare havinghad a positive impact on their business
  • 19. None Increasea10% Increasebetween10%and20% Increasebetween20%and50% Increasemorethan50% 20 What impactdo you estimate in the 2020 income vs. your annual budget? 5. 23%22% 20% 18% 17% Impact onstartups that declare havinghad a positive impact on their business
  • 20. 21 23,2% 9,2% 8,5% 18,3% 31% 9,9% How much impact has had the crisis to your billing/activity in March 2020? 6. None Decrease more than 10% Decrease between 10% and 20% Decrease between 20% and 50% Decrease more than 50% End of activity Impact onstartups that declare havinghad a negative impact ontheir business
  • 21. 22 4,2% 6,3% 20,4% 34,5% 28,9% 5,6% What impact do you estimate in the 2020 income vs. your annual budget? 7. None Decrease less than 10% Decrease between 10% and 20% Decrease between 20% and 50% Decrease more than 50% End of activity Impact onstartups that declare havinghad a negative impact ontheir business
  • 22. 23 How long your business could stand if the situations continues this way? 8. 1 month 2 - 3 months Less than 6 months Less than 9 months Less than 12 months More than 1 year 5,6% 19,7% 23,9% 14,8% 14,1% 21,8% 20% of the startups consider that they will not survive if the crisis lasts more than 3 months
  • 23. 24 In the next 3 months, how is going to evolve your number of employees? 10. Increase Stands We will do work time redutions We will do temporary dismissals We will do permanent dismissals 20% 9% 52% 8% 11% 72% of startups plan to maintain or increase their number of employees in the next three months.
  • 24. 25 Do you have a Contingency Plan? 11. Yes, we have implemented it We are working on it No 60% 30% 10% 60% of startups have already implemented a contingency plan
  • 25. 26 42,2% 12,3% 8,6% 5,9% 13,4% 5,3% 2,7% 9,2% Are any of this actions part of your Contingency Plan? 12. Reduce operational costs Reduce marketing investment Delay or suspend supplier payments Reduce working-day time Reduce the number of employees Change activities or process Remote working Others
  • 26. 27 Are you looking for financing? 13. Yes No 54% 46% 54% of startups are actively seeking financing
  • 27. 28 0,7% 16,3% 15,9% 10,2% 18,4% 17% 18% 3,5% Stands out public aid (18.4%), loans (17%) and grants (18%) What kind of financing are you looking for to overcome the crisis? 14. I am not looking for funding Investment round with VCs Business Angels Payment delay State Aids Loans Grants Others
  • 28. 29 Value the teleworking implementation success. 15. Average score 4.42 85% of the startups have successfully implemented teleworking and without affecting the dynamics of their business
  • 29. 30 Are you carrying out a retention client plan? 16. Yes No 60% 40% 60% of the startups have implemented customer retention plans
  • 30. 31 What future perspectives do you have for your sector after the crisis? 17. 57% 34% 9% Optimistic perspective Negative perspective Don’t Know 57% of startups look to the future with optimism
  • 31. 32 Have you taken any action that generates a positive impact in this crisis? 18. Un 59% de los fundadores está embarcado en acciones orientadas a generar un impacto positivo en la sociedad durante la crisis. 59% 41% Yes No 59% of startups are leading actions with a positive impact on society