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COVID-19: Opportunities for Start-ups

IBEF, Knowledge Centre

Oct 09, 2020 18:23

India has an ambitious plan to create a US$ 5 trillion economy by 2025. To achieve this goal, the country is focussing on knowledge economy-led development. Knowledge-driven activities add significant value to the economy and accelerate GDP growth. Key knowledge drivers include innovation, R&D, human capital, intellectual property and intensive formation of new specialisations.

Start-ups are catalysts for radical innovation and have emerged as key factors in economic growth and development. Start-ups have always played a supporting role in the recovery of countries from the moment of crisis. For example, start-ups such as Dropbox, Uber, Airbnb, and WhatsApp have all been founded during or immediately after the global financial crisis. Taobao, one of the largest e-commerce websites in the world, was started during the SARS epidemic in 2003.
Even during the current COVID-19 crisis, start-ups have continued to play a critical role in India. An example is a Mumbai-based start-up, which is offering emergency rides to frontline helpers, medical patients and essential service providers. These innovative start-ups have responded fast to the pandemic and are helping India shift towards maintaining economic activities by digitising work, education and health services, and are also providing innovations in medical goods and services.


Today, start-ups have opportunities to innovate and create a new business model, which can be used for short and long terms. Innovations that can help in the short run include tele-medicine, remote personal care, medical equipment, home delivery, food processing, teleworking, online education and contact tracing. However, these innovations are to address specific activities for which there an is immediate need.

Second level of opportunities are long term and a result of the pandemic-induced persistent changes in societies, consumer habits, or needs. These changes are expected to uncover valuable business opportunities for start-ups such as the demand for remote working, education, e-commerce, health services, and global value chains.

For these sectors, the new normal will bring in a whole new market that was untapped. Some of the innovative startups have already started working on these lines.

The following are examples of sectors that could be at an advantage for their business model:

Key sectors with opportunities for start-ups:

  1. FinTech

Disruptions due to the pandemic is anticipated to bring in a record economic low in the upcoming days. Cash reserves of common people is expected to decrease or exhaust due to aggravating issues such as unemployment and health. In that situation, the existing regulated financial service providers and the NBFCs have a pivotal role to play. However, the demand would be more of unsecured lending and people would need funds against the least of collaterals. This will create challenges for conventional banking systems due to regulatory policies.

This will open a door of opportunity for fintech companies and companies that can offer P2P lending facility or the service where funds can be granted on short notices and with less collateral.

  1. Shared office spaces

The prevailing wave of remote working culture and cost-cutting measures is pushing companies to set up cost-efficient physical offices, leading to the rise of shared office space service. Currently, people are unlikely to travel for work and most employees are likely to work from remote locations after the pandemic. In that situation, these managed office spaces would provide a suitable alternative to startups, SMEs and large corporates. These shared spaces are safer than conventional offices and cost a small proportion of the earlier operational costs.

  1. Digital/Online Education

Online education and tutoring have been in the market from quite some time; however, the current pandemic has showcased the importance and unique capabilities of this medium.  These online education providers have been critical in the present times when schools and educational institutions are not able to function normally. At present, the online education sector is observing a swift surge and people are looking up to online education providers as an alternative to conventional teaching and learning.

The demand is created by consumer behavior changes due to the COVID-19 pandemic. Due to the highly infectious nature of the disease, people are refraining from sending children to places where social distancing will be difficult.


Disruption in transportation services and fear of infection have prompted organisations to offer the remote working facility to their employees. This has created a demand for Saas & Remote Working Tools. These tools facilitate ongoing projects and support business continuity. Also, the companies are now realising the benefits of remote working and some organisations such as TCS have highlighted its plan to continue the remote working arrangement even after the COVID pandemic.

These tools are expected to help numerous companies across the globe by supporting during the hour of need and addressing the current work culture to improve productivity.


COVID has resulted in people strictly practicing social distancing. This means that people are abstaining from gathering at markets, grocery stores and public places and hence, the E-commerce and Delivery segments have lucrative opportunities.

E-commerce companies offer a relatively safe way to procure essential and non-essential commodities. The industry is likely to witness a spike in customer retail operations.

Though this industry was already on a growth trajectory, the recent situation has catalysed the entire growth prospect to unprecedented levels. People who previously refrained from using online channels are now adopting it to procure their daily needs.


OTT media and online gaming have gained huge traction in the entertainment sector. Owing to the ban and restrictions on multiplexes, gaming zones and other recreational-amusement installations, OTT platforms and the online gaming world have gained significant user base during the lockdown period.


The ongoing global health emergency has created a huge opportunity for the sector to position itself as a necessity among consumers. The pandemic has viciously exposed lack of healthy lifestyle among consumers and now, people are looking forward to whatever can help them stay fit and healthy. The industry needs to brand itself as a frontrunner in improving health and has the utmost growth potential.

Additionally, various advisories by the authorities are also endorsing such things, resulting in exponential demand growth with existing entities already having to deliver beyond their capacity.