The last few months have felt like a shift that should have taken years. HAX, with our largest hub located in Shenzhen, saw the earliest effects of COVID-19 in January. What began with uncertainty, rapidly led to lock-downs and isolation for our staff and our portfolio companies. There is no question that tough times are ahead, but at least for now, we have some hope for the global situation as Shenzhen begins its return to a new normal.
There will be many start-ups that don’t make it through these tough times, but just as many (if not more) are fighting to keep up with the massive new opportunities ahead of them.
Our days are full of back-to-back calls with founders from our international portfolio; they face constant change, forced to make decisions today that will impact their trajectory in the coming years. Being at the forefront of the outbreak has given us a preview of what the other side of this health crisis may look like, which we are using to help our founders understand a post-COVID world.
HAX is evolving to get ahead of COVID-19. How we invest is evolving too.COVID-19 is no longer a crisis in China; hopefully, the same will soon be true for the rest of the world. However, until we have a treatment or a vaccination, COVID-19 could continue to affect the future of healthcare, work, entertainment and education. There will likely be less travel, activities could decentralize, and micro lock-downs will be a new reality. Just recently in China, one county was locked down as a second surge of the virus emerged. In Hong Kong, the initial response was very successful in halting infections. But a premature lapse of social distancing created a new wave of COVID-19 which has now led to increased measures and a zero travel policy.
Here at HAX, we have already transitioned how we collaborate with start-ups, to ensure we can continue to support their development from anywhere in the world in the immediate future. Next, we face the threat of a global recession. While nothing is certain, we need to consider both how we operate and where we invest amidst uncertainty, all while doubling down on the long term future we believe will be built by start-ups developing hardware-based solutions over the next decade.
COVID-19 has pushed the healthcare system to a breaking point. While flattening the curve helps the situation, until there is a vaccine (or better still a treatment), this burden may continue to exist.
“It’s no longer about not getting sick; it’s about keeping everyone out of the hospital.”
A recently published point system, designed to help doctors triage patients access to ventilators in the event of a shortage, gives us a morbid insight into priorities for innovation in remote healthcare. It is not just the elderly that should keep away from hospitals, but also those that have Asthma and other respiratory illnesses, coronary health issues, diabetes and an impaired immune system.
Our sister accelerator, IndieBio, has done a fantastic job of mobilizing to create rapid test-kits, like ones being worked on by Caspr Biotech under a new COVID-19 focused program. Teams within this program will also have full access to HAX resources, allowing them to accelerate any hardware development needs they may have.
At HAX, we’ve focused extra attention on working with our start-ups who are iterating solutions to the following conditions:
- Lung disease
- Adult-onset diabetes
- Cardiovascular disease
- Arthritis
- Depression
- Kidney and bladder problems
- Stroke rehabilitation
These are areas that technology can play a role in assisting or monitoring at-risk patients. It’s not just for the elderly; some of this technology can help overstretched hospital staff to keep tabs on critically ill people, allowing them to make decisions that could save lives.
There is a marked difference between a full lock-down and an increase in working from home. Being trapped at home is unlikely. However, places with communal activities, like local shopping malls, gyms, bowling alleys, cinemas and bars could be replaced by at-home alternatives. Peloton, for example, has already shown promise in grabbing market share from Soul Cycle. Recent trends could accelerate this adoption.
We also think there is room in logistics innovation to contract timelines from hours to minutes for essential items. The efficiency of micro logistics and localized delivery could become increasingly more critical as people and goods have more chance of being trapped in areas where they cannot reach each other. New technology in track, trace, and fulfilment, in environments with little human to human contact, have a clear path to success.
We see the future of remote working as a real opportunity for innovation. We are actively searching for investments in the following areas:
- Employee mental health
- Conference call experience
- Digital/physical collaboration
Education is another sector that might see increased scrutiny as a result of social distancing. In China, e-learning has exploded and is an area that we are already heavily invested. Start-ups that help students stay engaged, and focused on learning, will see an increase in adoption in classrooms at home, allowing flexibility.
Facilities need cleaning and maintenance now more than ever, and factory lines must continue production. People will always be an instrumental cornerstone of the work-force but both service and industrial robotics can rise to support the new requirements of work.
Undoubtedly there will be a drive for automation in manufacturing, but herein lies an issue in the short-term. Factories are currently feeling the pressure of a global shrink in demand. They operate on thin margins and therefore unable or unwilling to invest in CapEx. It can also take months to integrate robotics into factory processes, with the majority of the cost in systems integration, not the robotics themselves. We are actively searching for technology in the following areas:
- Fast programming and integration of robotics
- Low CapEx automation
- Remote-controlled robotics
- Human trained robotics
- Low-cost service robotics
- Sensing and intelligence for automated processes
A number of our start-ups have excelled in launching new solutions in this area in just the last month. Youibot, a Shenzhen based robotics start-up, recently developed Aris-2, an autonomous virus-killing robot for hospitals and airports.
Despite the many challenges ahead for society, we remain optimistic that technology and science will come together to form a path of hope. Every day we have bits of good news from the start-ups we are funding, from breakthroughs in testing abilities to sensing and care that can protect lives. If you are a start-up or an investor keen to get involved, we would love to hear from you.
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Originally published at https://medium.com on April 15, 2020.
