Pandemic puts the squeeze on tech startups: Report

SOME tech startups are bleeding heavily across the region, despite the coronavirus pandemic's lift to segments like e-commerce and tele-health.

Citing a plunge in online searches for short-term letting platform Airbnb in Singapore, Malaysia, Thailand, Indonesia and the Philippines, Maybank Kim Eng economists wrote: "The 'sharing economy', such as home sharing and co-working space, has been severely impacted."

Ride-hailing firms pivoting from private-hire rides to food and logistics delivery, but the analysts added that South-east Asian market leaders Grab and Gojek "are burning cash to maintain their fleet, at a time when venture capital is freezing".

The rival firms have both set aside millions of dollars in relief measures for infected, quarantined and otherwise affected drivers.

Meanwhile, co-working spaces were highlighted by the Maybank Kim Eng analysts as another tech-based "sharing" industry that could flop as tenants stop paying or try to pull out of their leases.

Christine Li, real estate consultancy Cushman & Wakefield's regional research head, noted earlier in April that co-working take-up is already flat as remote working and staggered work hours "reduced the immediate demand for new space" in the prime office market in Singapore.

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Still, the Maybank Kim Eng analysts said that lockdowns adopted to curb the spread of the deadly virus "will likely increase e-commerce penetration in Asean, similar to how the Sars episode in 2003 was a turning point for China e-commerce giants Alibaba and JD.com".