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What Impact Has Coronavirus Had On Local Tech Companies & Startups?

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Corona Correction… An intriguing term that has been used by some financial analysts to denote how the pandemic has “corrected” and continues to “correct” market valuations for business all over the world.

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After reading a number of these theories, I was left wondering what kind of impact has the virus dealt to local startups and tech companies. We thus set out (not physically though) with the goal to get perspective from some local startups whilst taking a look at some of the bigger companies to get a clearer picture of how COVID-19 has impacted their operations.

Telecoms

The initial impact of COVID-19 started rearing its head in the telecoms industry, with ZOL and TelOne running out of MiFi modems back in February – whilst both companies never explicitly confirmed that the virus is the cause of the delay, the widespread belief is that the MiFi modems are imported from and made in China, and thus they’ve become harder to get as Chinese factories had started closing down in January.

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Outside of bringing equipment into the country, other telecoms companies such as Econet recently announced the closure of one of their shops in Harare’s CBD after an employee came into contact with someone who had tested positive for the virus.

For these industries customer queries, customer acquisition and a whole host of services will be affected over the next few weeks if not months as people go into lockdown.

On the bright side, the feeling globally is that telecoms service providers might see a surge in bandwidth usage during this period as people are stuck at or working from home.

Innovation Hubs – Stuck in the mud

Innovation hubs which house many local small and medium enterprises will be affected adversely. BancABC’s Ignition Hub, an innovation hub which opened its doors a fortnight ago, has quickly closed those doors due to the virus;

Dear Ignition Hub Member. Please note the hub will be temporarily closed for the next 30 days as part of our COVID-19 prevention measures. We will advise you when the Hub reopens. Thank You.

BancABC message to Ignition Hub members

We caught up with Tadzoka Paswarayi, Founder of Impact Hub Harare and they too closed the hub in response to the virus, but beyond just the closure she also explained how this impacts the people who work from their premises. These SMEs and individuals get to lose access to the infrastructure Impact Hub offers i.e constant supply of electricity and internet access.

Impact Hub hosts a number of events and one such event which they’ve had to cancel is the kids Coding Bootcamp they intended to host this April. Not only do they lose revenue when things like this occur but some kids equally miss out on a life-altering experience.

There’s no other way to put it, the impact of Coronavirus will adversely impact everyone but equally, there are opportunities. Tadzoka expressed some of that optimism saying the virus and its impact has put to the test and reinforced some of the remote working concepts they already teach in their MicroWorkSpace program along with showing the Impact Hub team how to leverage WhatsApp as their primary tool for communication during the time they can’t come into the office.

Startups

For companies, like Fresh In A Box human interface is the name of the game. Every day they deliver fresh vegetables, groceries and more to families and individuals right on their doorstep. A virus which results in lockdowns and minimal human interface obviously poses e a huge blow…

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[Image source: FIAB Twitter] Fresh In A Box employee wearing face mask and glove

Talking to Kuda Musasiwa the founder of FIAB would leave you thinking otherwise. Positive and loud as he always is the founder expressed that [as of last week when we were in conversation] they had experienced an increase in numbers of orders as their customer-base was self-isolating;

As more and more people are self-isolating, we are now busier than ever. More people are now seeing the convenience of eCommerce.

Kuda Musasiwa – FIAB Founder

More important than the increase in orders Kuda emphasised that the virus presented an opportunity for businesses to offer an outstretched hand to customers during the epidemic and one way of doing this was not looking to profit from the crisis:

The biggest intuition is to profit from situations like this. You’ll see increases in prices of things that people want. We are going to buck the trend and we won’t hike prices during these desperate times…

Kuda Musasiwa

Lastly, Musasiwa believes that eCommerce players can benefit by coming together and providing a service and making sure the spread of the virus is minimal by setting standards for (i) how the tech they use should work and (ii) how they can improve on eCommerce service delivery in general

The domino effect

After the announcement that Schools and Universities would be closing ahead of schedule, the Housing Hub found itself in a strange place. When your target market is university students looking for accommodation such an announcement means revenue forecasts instantly plummet;

The governmentt has closed down Universities and the institutions have asked all off-campus homes to be shut down, so that means procedures and business may be halting as we are closing down our homes. Revenue streams are going to be affected

Marvellous Nyongoro – Founder & CEO of Housing Hub

It would be great if they had one problem to deal with but when it rains it usually pours as well. Student agents under the startup are no longer willing to move around registered properties performing inspections – an understandable stance given how easy it is to get the virus. For the student agents who are comfortable to perform inspections, tenants are not as welcoming… again understandably so.

With this being the case there is one silver-lining, The Housing Hub is taking this as an opportunity to revise the way they do things;

We have decided to automate a significant number of items on the platform so that they can be done remotely without having human intervention (accounting, inventory reconciliations, fully automated booking procedure, feedback and rating etc). This will reduce human intervention, which will put our staff in a safer position

Marvellous Nyongoro

The perspective of a phone repairer

Like Fresh In A Box, Ixar Mobile -a phone repairing startup run by Tinofara Mutovongi- is premised on interfacing with people and similar to the IAPs mentioned above they require parts from China. Talk about being caught between a rock and a hard place;

For Ixar Mobile Repair, they have been unable to import spares for close to 4 months now – Chinese factories that manufacture spares closed after Christmas. Wholesale market for spares has essentially died and they’ve had to turn away a number of customers because they just don’t have the spares;

With every passing day, spares are becoming more scarce. As that continues to be the case phones won’t stop breaking and it’s going to be difficult to repair phones as we might not be able to get the spares.

Tinofara Mutovongi – Ixar Mobile Repair

Above and beyond, Mr Mutovongi expressed fears regarding the impact on phone resellers who also haven’t been able to import phones consistently for months on end now.

Corona taketh away… Corona giveth

At a time when the world is coming to standstill, it’s important, to take Coronavirus and its widespread impact extremely seriously but equally, there’s an opportunity to rethink your business and personal life and see which aspects you can grow in or optimise during this unwelcome break.


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