Startups hit by virus scourge

Published March 24, 2020
While closure of educational institutes dragged down ride-hailing numbers, education-tech startups noticed an increase in demand as schools, colleges and universities have been forced to pivot towards remote learning. — Dawn/File
While closure of educational institutes dragged down ride-hailing numbers, education-tech startups noticed an increase in demand as schools, colleges and universities have been forced to pivot towards remote learning. — Dawn/File

KARACHI: The tech sector is discovering that it is not immune to the virus scourge that is debilitating large sectors of the country’s economy.

Bykea, Swvl, Careem, and Uber on Monday shut their services in Sindh after the provincial government enforced a lockdown.

“In accordance with the Government of Sindh’s directives, we have taken measures to temporarily suspend our services in Sindh, effective 12 am, on Monday,” the notification from Careem read. Meanwhile, Airlift had already stopped operations a few days back.

The impact may not be restricted to transport related tech companies. Delivery based outfits are also likely to take a hit as all movement on the streets draws to a halt. “Technology companies, particularly startups that have limited capital are going to see very stressful times in attracting capital into the country amid complete curfew-like shutdowns. We really hope the nation survives this economic blow as startups with two-sided marketplaces in transport and hospitality will be the first to bear the brunt ,” says Bykea CEO Muneeb Maayr.

Speaking of the impact on his business just before the lockdown, he said: “Since colleges were shut, ride-hailing service was down 10 per cent while deliveries were moderately up.”

While closure of educational institutes dragged down ride-hailing numbers, education-tech startups noticed an increase in demand as schools, colleges and universities have been forced to pivot towards remote learning.

Fatima Rizwan, founder CEO of Plutwo - one such edtech portal, while commenting on the rise in inquiries for the startup said, “we definitely have seen a surge. Specially educational institutions and event organisers are more interested in using our platform now. Without Covid-19, it would have been hard to convince them to try virtual classes and events.”

Endorsing that view is Raza Naqvi of SafePay, a business-to-business payment gateway that allows anyone to accept credit/debit cards. “There is a slight uptick currently - but that in itself is surprising considering a slowdown in the overall economy due to the current situation. We would have expected a decrease in volumes. However we are getting more applications from businesses wanting to go digital (remote learning, online counselling) etc.”

The virus has also infected e-commerce business as consumer affordability has been adversely affected, coupled with suspension in delivery services. “The purchasing behaviour has changed drastically. Only one-third of the people are now thinking about buying non-essential items,” says Hammad Khan, founder of Pakistanistores.com, an aggregator of e-commerce websites.

“Things started turning from last Tuesday after hubs like Saddar were closed down and have since seen at least a 50pc decline in the number of orders,” Muhammad Hassan Khan, CEO of Trax Logistics, a startup that mostly caters to e-commerce stores. “Much of the load drop has come from Karachi while the demand stayed largely the same in Punjab,” he added.

“The biggest hit has been taken by small and medium enterprises who have scaled down their digital marketing due to uncertainty. On the other hand, brands tried to switch their brick and mortar business online and stepped up deliveries initially,” he continues.

“We are taking it on a day-by-day basis and will try to be operational tomorrow (today) as rumours have started floating that the government is considering to exclude courier [services] from the lockdown.”

Published in Dawn, March 24th, 2020

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