Coronavirus: Grocery delivery, healthcare, e-commerce and edtech are booming

The latest quarterly report from Magnitt released on Monday morning indicates a surge in investment by two per cent year on year basis and states that "investor appetite in startups that have seen increased activity in the current time, with grocery delivery, healthcare, e-commerce, and edtech seeing an increase in both customers and investments".

The Middle Eastern and North African (Mena) startups investment report highlights that startups raised $277 million in the first three months of 2020. However, this was largely attributed to a strong start to 2020, with several startups raising large funding rounds in January and February, including Kitopi ($60 million), Vezeeta ($40 million), and SellAnyCar ($35 million).

The number of investment deals, on the other hand, paints a different story. In Q1 2020, deals were down 22 per cent compared to Q1 2019, with March 2020 alone seeing a drop of 67 per cent compared to the same month last year.

"Historical data highlights that investment rounds across Mena tend to take, on average, 6 months to come to fruition," explains Philip Bahoshy, Magnitt's founder & CEO. "We will most likely not see the full impact of Covid-19 on the venture funding space yet for a few months. However, early indications have already shown a slowdown in funding announcements, as startups and investors re-evaluate their positions in this new environment."

Through research led by Magnitt, Mena's investors and accelerators highlighted that they were still actively investing (as of March 2020) despite the current crisis. A preliminary survey poll based on 100+ startup founders participating in Magnitt's weekly webinar series saw: 59 per cent of founders mention that their business had already been impacted by the crisis; 48 per cent cite revenue generation as their major concern; 25 per cent pointing to fundraising as the issue that keeps them up at night; 41 per cent anticipate lower-than-expected revenue growth rates in 2020 and with 29 per cent anticipating revenue below 2019 figures.

In a sign that startups and investors are quickly adapting to the 'new normal', more fundraising activity is moving online. Magnitt's fundraising tool, which virtually hosts 74 investor and accelerator applications, has seen a 117 per cent increase in applications month-over-month since January, as startups increasingly look for alternative ways to fundraise during the current crisis. - sandhya@khaleejtimes.com