Coping with coronavirus outbreak, a black swan event

Dear readers,

As the Covid-19 outbreak rages on, it could trigger a prolonged global economic slowdown, creating a challenging environment for business. Startups need to be nimble and agile to cope with the effects of this viral disease, which Sequoia Capital dubbed as “the black swan of 2020.”

Covid-19 is negatively affecting eight out of 10 startup businesses, according to a recent Tech in Asia survey. The travel industry is the hardest hit, as the majority of businesses cancel travel plans to minimize the spread of this illness.

That’s certainly adding to the challenges of Indian hotel startup Oyo, which had just announced plans to retrench 5,000 employees globally in an effort to cut costs and boost profitability. Our latest visual story tracks Oyo’s dizzying rise to decacorn status – a great achievement, but investors are questioning the valuation for the SoftBank-backed loss-making company.

Photo credit: OYO

Oyo is not the only startup rightsizing its operations. At least three Singapore-based startups have initiated job cuts in recent weeks.

Hmlet, which leases spaces and sublets them to long-term tenants, is letting go 10% of its staff as it undergoes its biggest overhaul yet.

Paktor, which operates a slew of dating apps and an offline dating agency, has slashed its headcount to 190 last year from 250 in 2018 and is looking to downsize by another 5% by the end of this quarter.

CXA Group, a corporate healthcare insurance startup backed by Facebook co-founder Eduardo Saverin, has laid off dozens of staff as it seeks fresh funding from investors. CXA founder and CEO Rosaline Chow Koo has spoken to Tech in Asia journalist Melissa Goh in an exclusive interview. Stay tuned for our follow-up story.

While retrenchments are bad news, such moves are sometimes necessary so companies can survive through turbulent times. These events tend to be temporary and tests the companies’ ability to adapt.

TIA had a similar experience in 2018, and last year we became profitable for the first time. As my colleague Willis Wee says in his recent commentary, we should turn disasters into a driving force as Alibaba did 17 years ago during the SARS epidemic.

Indeed, while difficult times don’t last, tough people do. Such challenges are actually opportunities in disguise. To succeed, all we need to do is buckle up, find solutions, and execute well.

Check out the rest of our premium content from last week:

Long reads

• Edtech firm Byju’s keeps India focus as revenue growth triples
• A low-key $300m company plans to disrupt Indonesia’s supply chain ‘mafia’
• Why did Grab buy a robo-advisor few people know about?
• Commentary: A Grab-Gojek merger makes sense but isn’t the smartest play

Rising startups

Venture capital fundraising