Bangladesh's budding startups, which had drawn a good amount of local and foreign investments after showing potentials before COVID-19 pandemic, are now striving to continue their business, insiders have said.
They said such ventures, mostly technology-based, are now witnessing a drastic fall in their revenue earnings which is being translated into job cuts, pay cuts and complete closure for some businesses.
Before the novel coronavirus outbreak, the country's startups, some of which were on the right track about a couple of months ago to reach break-even point after several years of continuous investment, learning and development, had also showed their rapid scalability and bright prospects, they mentioned.
According an estimation of the Venture Capital and Private Equity Association of Bangladesh (VCPEAB), due to the COVID-19-induced crisis, nearly 300 startups together are facing over Tk 4.5 billion loss as sales of their products and services have remained suspended completely or partially.
Some of the startup companies have said that now they are in distress.
Local startups provide a wide range of services including ridesharing, financial technology, logistics, goods delivery, vehicle booking and content via digital platforms like website and smartphone application or app.
Almost 0.15 million people, who are directly employed by the start-ups, may soon face difficulties to continue their job, a recent statement of the VCPEAB said, adding that about 0.7 million service providers associated with these startups have already become unemployed.
App-based inland lighter ship hiring solution provider 'Jahaji' is now doing business on limited scale by giving support to their existing customers rather than looking for new ones, said the startup's Chief Executive Officer (CEO) and cofounder Kajal Abdullah.
"We cannot accept new customers as the technology requires installing a device on vessel that helps service recipients track the movement of their ships," said Mr Abdullah.
The service is said to be the first of its kind in the country.
Jahaji had set a target to start logging profit from November this year, which will obviously be delayed, he feared. He suggested that the government should provide financial supports to the startups as they have been playing a vital role for bringing transparency and discipline in some sectors with the help of technology.
Anayet Rashid, CEO and founder of 'Truck Lagbe', a platform in the country to hire trucks, said, the demands has fallen below 30 per cent at the beginning of nationwide general holidays and long closure due to the pandemic. The revenue also fell below 30 per cent, he informed.
"Though the goods carrying truck is considered by many to be an emergency service but we have witnessed a drastic fall of its demand at the start of the countrywide closure," he mentioned, saying the demand had been estimated to be over 50 per cent in the last couple of weeks.
"We will ask the ICT division to formally declare the service as an emergency one, as trucks are required to carry essential goods, including relief items, to different destinations across the country," said Mr Rashid.
There are over 50,000 trucks enlisted with the platform which began its journey in 2017 and brought in investment mostly from foreigners.
The company set its sights on earning profit from this year, which now seems unlikely due to the deadly virus outbreak, he stated. "Now we cannot aggressively look for making profit as we had planned," he said.
However, he was hopeful of a turnaround after the crisis ends.
Pathao, Shohoz, Sheba.xyz and chaldal are widely-known start-ups in the country.
A recently held regional competition of the Startup Worldcup 2020 selected Bangladesh's Gaze Technologies as the champion. The company provides Artificial Intelligence (AI)-based security system.
Its (Gaze) CEO and cofounder Shehzad Noor Taus told the FE that the company is facing no trouble at all as it has been exploiting different IT solutions for continuing its activities.
He said the company is about to introduce some tools which will be convenient for the clients, including a good number of government agencies like Bangladesh Police, city corporations, as well as private sectors," he added.
Tina Jabeen, investment adviser to Startup Bangladesh, a platform of the ICT Division to promote such entrepreneurship, said that it was found in a recent survey that majority of the startups have witnessed drastic fall in revenue earnings after the Covid-19 outbreak.
The local startups fetched more than $200 million foreign investment in the last couple of years and directly and indirectly generated 1.5 million employments in the country, she informed, saying a large number of micro and small entrepreneurs are linked with the startups.
"Startup entrepreneurs can cope with changes within a short span of time," she said, highlighting the potentials of local the companies.
She, however, said that the stalamate has brought some opportunities for the entrepreneurs to complete many activities which have remained incomplete due to time constraint.
The situation will definitely improve in future and huge prospects will be opened up for the startups after the end of the crisis as the investors will likely prefer making more investment in this business, she said, adding "The point is can they seize the moment?"
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