Prepare to ride out this pandemic-triggered recession until 2022

Dear readers,

There will eventually be a light at the end of this dark tunnel, but until glimmers of recovery begin to shine through, startups will have to be conservative with their expectations.

As startups struggle to survive the economic fallout from Covid-19, companies will have to adapt stricter financial discipline, while pivoting their businesses.

Amit Saberwal, founder and CEO of Singapore-based hospitality firm RedDoorz, and Dimitra Taslim, an investor at GGV Capital, spoke last week at Tech in Asia’s virtual panel discussion where they shared their views on how startups can pull through the pandemic. Their advice: Prepare for the worst.

Photo credit: ThePixelman.

Startups in the travel sector are among the hardest hit, and RedDoorz has taken tough measures to stay afloat. The company has reduced costs and budgeted for zero revenue growth in the next 12 months to extend its runway to mid-2022, Saberwal says.

While RedDoorz shed less than 10% of its manpower, froze hiring, and slashed management salaries, Saberwal emphasized that startups should make the right adjustments because if you cut too much now, it’s going to be difficult to rebuild teams once recovery comes.

Apart from cost-cutting measures, startups also need to look internally for operational improvements they can implement while waiting for the recovery, says GGV’s Taslim. Many Chinese startups did that during the 2003 SARS outbreak and came out stronger, he says. For instance, ecommerce giant Alibaba launched customer-to-customer marketplace Taobao during that period. GGV was among the early investors in Alibaba.

Here are the rest of our premium content from last week:

Long reads

• Video streaming in Asia is not for the faint of heart
• An influential new Indonesian VC could open doors for startups
• How a Singaporean became a billionaire by selling microchips

Rising startups

• 50 rising startups in Southeast Asia
• Meet the 20 top-funded startups and tech companies in Indonesia
• Korean grocery startup Kurly secures $150m from Sequoia, Hillhouse, DST
• Tencent-backed Voyager secures $120m investment commitment for e-wallet service
• Indonesian P2P lender Investree bags $23.5m to fuel Southeast Asia expansion
• Swiggy banks $43m from Tencent, Samsung, others

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I’ll speak to you again next week.

In the meantime, let’s remain optimistic and look for silver linings in this cloud of uncertainty.

Let’s all stay home, be healthy, and keep safe!

Cheers,

Jonathan
Editor-in-Chief