2020 is the year of the peak of the COVID-19 pandemic. The virus has changed a lot and for a long time. The conditions of the pandemic, in which almost all states on the planet found themselves, not only slowed down the development of the market but, at times, threatened entire industries. Therefore, entrepreneurs had to urgently change their plans for the future.
In late November - early December, several major reports were published on the state of venture capital investments in the US and Europe. Investments went mainly to American startups, the vast majority of which are technology companies. In the third quarter, they raised $ 36.5 billion, which is 30% more than in the previous quarter and 22% more than in the same period last year.
In Europe, the numbers are smaller, but also record-breaking. Published on December 8, the annual report on the state of the European technology sector says a record of $ 5 billion in startup investments in September and a forecast of $ 41 billion in total for 2020, which is about $ 500 million more than in 2019.
As The New York Times reports, the boom in technology investment is not only driven by the rise in demand for digital products and services during the pandemic. Low-interest rates are forcing investors to seek profit in increasingly risky assets. According to experts, usually, private startups raise funding every 12-18 months, but now this happens every 3-6 months.
SEGMENTS, THAT GAINED POPULARITY
1. Online Games
At approximately $180 billion revenue, the online gaming industry turned out to be a bigger money-spinner than the global movie and North American sports industries combined in 2020, as per International Data Corporation.
A Deloitte report said global spending on video games shot up by 17% to $10.5 billion between March and April. The online gaming industry grew at a compounded annual growth rate of 21% during the lockdown, the report stated.
2. Hyperlocal Services
Companies offering hyperlocal services—from Swiggy and BigBasket to Urban Company and Pharmeasy—gained during the pandemic. Zomato announced it is likely to record its best-ever monthly sales in December. Online groceries clocked 1.7 times GMV in June compared to January. Urban Company said it crossed its pre-pandemic peak by more than 30% towards the second half of the year.
3. Video Conferencing
With work from home (WFH) becoming the new normal, meetings moved from boardrooms to bedrooms, and video-conferencing platforms became the means to connect for work—as well as personal life.
And a little-known video-calling app from the US made the most of this shift, even in India.
At $186 million, the profits of Zoom Inc. doubled over the year-ago in the July-September quarter of 2020. Fledgling video-calling apps of Big Tech firms, such as Google Meet, Microsoft Teams, and Cisco Webex, jumped on to the Zoom bandwagon. Even Facebook’s WhatsApp is testing a video- and voice-calling feature for its desktop app.
4. Streaming & Short Video
When cinemas and other public places were closed, people took to streaming to watch the latest shows and films from around the world.
Netflix added over 25 million subscribers in the first half of 2020. Earlier this month, Disney+ Hotstar announced that at 26 million, it accounts for 30% of Disney’s streaming user base.
Production houses were quick to notice this trend and chose to release their films—from Mulan to Gulabo Sitabo—directly on streaming platforms.
And when that wasn’t enough, we took to TikTok—to either watch or make our own 15 seconds of fame.
5. E-commerce, Online D2C
Pandemic-induced lockdown, stalled all but essential goods and services, including deliveries by e-commerce firms. But as the restrictions eased, Amazon announced that it had doubled its profits year-on-year in the April-June quarter.
The festive season lived up to its billing as well, with Flipkart, Myntra and Amazon clocking $8.3 billion worth of gross sales—a 65% growth over the previous year, as per a Redseer report.
Direct-to-consumer companies in categories from personal grooming to foods and beverages also saw a revival after a sluggish initial few months of the lockdown.
INDUSTRIES, THAT AFFECTED THE MOST
1. Travel, Tourism & Hospitality
As people stayed at home due to fear of contagion and remote-working took off, companies in outdoor sectors took a severe hit.
Earlier in December, Uber announced the closure of its driverless cars division in the wake of battered revenues. MakeMyTrip laid off hundreds. Though domestic flights started in June, airlines are nowhere close to operating at optimum capacity and are staring at huge losses.
Restaurants perhaps were the worst-hit as they are still gingerly stepping out of the lockdown.
2. Cinema & Outdoor Events
The coronavirus lockdown brought down the curtain on cinema and music gigs for most of the year. And that threatened the survival of allied businesses, including online ticketing platforms such as BookMyShow.
But even as he anticipated a bounce-back in the cinema business, BookMyShow is modeling itself to become a platform for hosting events virtually. During this pandemic and the economic slowdown, this has been a viable revenue stream for the company, according to a Quartz India report.
3. Shared Mobility
The shared mobility sector—from ride-hailing services to dockless bike-sharing, saw their business come to a standstill after the lockdown was announced in March.
While they did explore alternatives, such as providing rides for essential workers, enabling long-term rentals, and even partnering with e-commerce firms for deliveries, these failed to provide scale to their operations.
Even six months after the lockdowns ended, recovery in the number of rides has remained at under 35% for cab rides.
Despite the sad events associated with the global pandemic, 2020 was a successful year for new projects and, in principle, for the entire tech industry. The crisis gave a chance to prove themselves to small businesses and startups that were ready to work hard in the most difficult situations. And the lack of the need to work in offices has allowed many people to find their dream job.