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Lockdown and Corona Pandemic Assessed Favorable Two Startup Sectors

Lockdown and Corona Pandemic Assessed Favorable Two Startup Sectors

The government has not yet decided to quarantine an area (lockdown) to reduce the spread of the coronavirus. Even so, the lockdown and the Corona pandemic are considered beneficial for the two startup sectors namely education and health.

Chairperson of the Indonesian Venture and Startup Capital Association (Amvesindo) Jefri R Sirait explained, the two startup sectors offered solutions needed by the community in the midst of a corona pandemic. For example, residents are busy searching for information about covid-19 on the health platform.

Lockdown and Corona Pandemic Assessed Favorable Two Startup Sectors

In addition, many people buy health products such as masks, hand sanitizers to vitamins. As a result, transactions and levels of health platform visits have increased. The educational platform is busy being used because students learn from home, in order to keep their distance (social distancing).

“Startups are actually an effective solution (if the lockdown is done),” Jefri told Katadata.co.id, Friday (20/3).

In addition, social technology startup transactions (fintech) of crowdfunding, such as KitaBisa and BenihBaik, are predicted to increase. Even so, overall the corona pandemic has an impact on startup capital.

Lockdowns Can Have an Impact on Startup Transactions and Funding

Sales or transactions on platforms made by startup declined due to the pandemic. The decline is expected to deepen if the government implements lockdown. The reason is that people will withhold primary consumption.

Taking into account the impact on the economy, according to him lockdown will affect many startup sectors. The same thing was conveyed by Mandiri Capital CEO Eddi Danusaputro. Transactions are reduced, startups are also hard to find customers,” he said.

Lockdown and Corona Pandemic Assessed Favorable Two Startup Sectors

The lockdown policy can also have an impact on funding (fundraising). As a result, startups with lots of funds will be more efficient. Meanwhile, startups with little funds will have difficulty finding investment.

Financing startup fintech (lending), according to him, will be affected by the policy. Therefore, loan repayments have the potential to be hampered. “Especially those related to Micro, Small and Medium Enterprises (MSMEs) because of reduced income,” Eddi said.

However, the Indonesian Joint Funding Fintech Association (AFPI) noted, increasing loan applications by MSMEs. Therefore, they asked the Financial Services Authority (OJK) to relax the rules related to loan restrictions.

“For example, from the previous limit of IDR 2 billion to IDR 3 billion or IDR 4 billion,” Chairman of the Public Relations and Institution of AFPI Tumbur Pardede told Katadata.co.id, yesterday (19/3). In addition to the improved loan ceiling, AFPI wants the financing tenor to be extended. The request for relaxation will be submitted to the FSA this week.

Transactions at a Number of Startups were Recorded Rising due to Covid-19 Outbreak

Good Doctor recorded transactions in the form of question and answer online on the platform jumped 26 times. Good Doctor is a healthcare provider, which is a partner of Grab. Health startup, Alodokter also recorded visits to the main information page on the platform reaching 2 million since the coronavirus outbreak.

Increased transactions are also felt by education startups. Mainly, after telecommunications companies such as Telkomsel, Indosat, XL Axiata, 3 Indonesia and Smartfren provided internet quota promotions for online learning platforms.

Ruangguru, for example, marked that there were more than 1 million users utilizing the 30 Gigabyte (GB) free quota facility from Telkomsel on the day of its launch. Ruangguru application downloads were also ranked first in the Google Play Store in Indonesia last Tuesday (3/17), defeating WhatsApp and TikTok.

Interestingly, the online game platform also flooded enthusiasts in China because of the corona pandemic. Game downloads, developed by Tencent Holdings Ltd, for example, increased 10.4% year-on-year (YoY) in February.

“Revenues increased by 11.8%,” Sensor Tower Analyst Nan Lu was quoted by Reuters on Wednesday (3/18). The increase is also in line with research by mobile marketing company AppsFlyer. Based on surveys from January 1-31 and February 1 to March 2, game application downloads in Indonesia have increased.