Ahead of the bank holiday weekend on lockdown LMRE was glad to support the latest 'Ecosystem' webinar by Tzvete Doncheva, 'Re-Building resilient winners: Urban life innovations post-lockdown' with some fantastic guest speakers. Check out our blog below!
The session is part of the 'Ecosystem' series, more information below:
We are now into week 6 of lockdown in the UK and while many countries are easing back restrictions it is fair to say that life and indeed business won’t be straight back to normal. The impact of Covid-19 on businesses has been drastic and hard felt across most sectors, but how can businesses prepare for what is to come and what should they lend the majority of their time to? To that end Manu explained that Lakestar have been working with each of their businesses independently, to make sure that each one has enough of a cash runway to weather the storm. They have advised their businesses that of course look for opportunities to strengthen your company that might not have been possible before, but first and foremost, concentrate on looking at your books and that cash runway. Both Manu and Roelof agreed that becoming a resilient company and one that weathers such storms involves making hard calls, whether that means turning to government support, furloughing employees or taking a hit on your valuation in order to get funding, in the long term you will be better for it.
The conversation turned to funding, how has the lockdown changed the landscape of VC funding? Are companies still getting funding? Of course they are, and in many ways there is plenty of white powder out there - VCs have to deploy that cash. As Manu explained, he thinks that the smaller seen funding rounds will be easier to come by than the large investments of the later stage funding rounds. On the basis that signing a $40 million dollar cheque to someone that you haven’t even had the opportunity to shake their hand is going to be quite difficult. The general sentiment was that the money is still there to be invested in startups, but the conditions have changed, the bar has now been set much higher and VCs are going to apply more scrutiny to businesses before they offload that investment.
There was certainly a degree of optimism amongst the panelists. With Roelof pointing to some of the silver linings that could be seen from the current situation, he explained that the lockdown has been a catalyst for technological innovation and uptake. Where once upon a time technology was priority 4 or 5 for businesses it was now priority number 1. Many people have witnessed this at a basic level as they have had to move to a ‘working from home’ environment. A situation often never discussed in the corporate world is currently the norm. But for startups, this means businesses are looking at ways to reduce human interaction, improve the cleanliness and safety of their workplaces. Roelof explained that as a result we might see an increase in investment towards robotics, cleanliness systems and filters for clean air in restaurants and office spaces.
From here the conversation moved to the topic of social mobility and transport - how will the pandemic impact the future of travel? Here Emilie pointed out that cities have made huge advancements on how cities operate, Paris for example have closed off vast amounts of roads to allow for increased cyclists, something she cited that might take 4 years but has happened in a matter of days. It is indeed true that many of us have enjoyed the quiet roads of the cities and indeed the pollution levels have dropped dramatically with carbon monoxide levels down 50% compared to this time last year. Florence made an interesting point, explaining that micro mobility has historically been used for the first or last mile of journeys, but she thinks that due to current circumstances that may change and innovation and technological advancement of longer journeys could help here.
Our panelists provided a huge amount of interesting insight into how startups are managing during this pandemic. Generally speaking it seems that proptech startups are largely in a much better situation than many of the larger corporates, they are used to innovation, they have the flexibility to pivot, to be agile. This is the time to focus on their core business, make tough calls when they need to be made, and if you weather the storm you will come out as a stronger business as a result.
Stay safe and enjoy the bank holiday,