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.
A NEWSLETTER FOR YOU
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
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".
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Asean
Microsoft bets big on South-east Asia, pledges billions in AI and cloud investments
Magnitude 6.0 quake strikes Philippines, aftershocks and damage expected
Indonesia central bank says SRBI auction will be held twice a week to attract more inflow
Thai police raid illegal bitcoin mining operation
Thailand’s April inflation rises slightly, first time in 7 months
Myanmar junta bans men from applying to work abroad: statement