Startups face fight to weather health storm

Sharp rises

Noting a significant drop in new regional funding in February, Tang, from Gobi Partners, said the market needs to pay attention to the sharp rise in such funding in March, mainly due to the announcement of some mega deals that had been under discussion since late last year.

In China, startups and technology companies raised more than $2.5 billion in March as venture capital funding rebounded, rising sixfold from $410 million the previous month, according to the Financial Times, citing data from the Asian Venture Capital Journal.

Tang said, "To some degree, there will be a very quick pick up in the deployment of capital going into (the second quarter) of this year." He added that investment pace and strategies would continue to play out given the amount of cash reserves or liquid assets available.

"I don't think there will be a decline of any significant length going forward. Sentiment (over COVID-19) here in Asia is not as bad as most people would think, because in Asia－and we are seeing this in China especially－containment of the virus has actually been fairly successful," Tang said.

"The cities and the (regional) economy are starting to normalize. It's still going to take some time for things to really get back to the way they were last year, but there is definite progress there.

"Sentiment in China is pretty good. People are aware of the situation and it is clear that the government is doing everything it can to contain the impacts of the ongoing pandemic."

Laboutka, from SEA Founders, noting that it is important for governments to understand the needs of companies at different stages, said his organization is in talks with administrative bodies in Singapore and other countries to find a way to support startups.

"Startups by nature are very creative and have (a sense of) survival in their DNA, as they are trying not only to see how they can revive revenue, but also optimize the cost side without letting go of the most important assets," Laboutka said.

He added that startups are showing the world in many ways how to survive the health crisis, as many of these companies are used to working remotely.

Harnal, from 500 Startups, said that in view of the phenomenal growth among startups in fields such as online learning, online work collaboration tools, telemedicine, and grocery and food deliveries, it is important for investors to focus on such companies' long-term development. This includes the fundamental changes needed to sustain business growth as a result of the pandemic.