Silver Lining in VC Amidst COVID-19
Rainbow After Rain
The current situation with the virus and economic downturn has undeniably impacted us in a couple of ways, including a massive impact on Travel Tech and fundraising activities.
However, as Warren Buffet once said
“Be fearful when others are greedy and greedy when others are fearful”,
we are seeing a skyrocketing market penetration in e-commerce and communications startups. We are already in conversations with a couple of startups that are riding on the phenomenon and picking up tremendous traction. When time is right, we might be able to take advantage of the current stagnant venture capital market and snatch a favourable deal with these startups.
Travel Tech Survival
The Travel & Tourism industry are inevitably taking big hits, and short-term forecast is tough. However, it’s just a matter of time when the coronavirus dies down and travel activities resume – but will startups survive?
We are seeing two determining factors: Business Fundamentals and Growth Model.
As we always emphasize, no matter how great the idea and product is, one must have solid business fundamentals to succeed. Business fundamentals determine the quality of a startup’s survival plan – being able to know when, what and how to cut costs, leverage on soft assets like investor’s resources, to survive the tsunami.
Growth Model is another key. If a startup is operating on positive unit economics, it will be 10x easier to outlast the trough.
2020 will be tough for Travel Tech, but there are solid gems out there that will survive and investors might be able to strike a good deal to get in.
Do you agree? Comment below your thoughts or reach out and chat with us!
A little about Catalyst Ventures: We are an early-stage venture capital firm based in Hong Kong. We love investing in the future of travel and marketing. Say hi to us if that sounds like your kind of thing, or just because. We love making new friends ;)
