At the X-PITCH Asia Summit held on August 3, delegates from India, Indonesia, Philippines, Malaysia, Singapore, Taiwan and Vietnam unanimously agreed that digital transformation is the key to success for startups during the pandemic. More than 300 guests from 18 countries attended this online conference.
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Event Replay: https://fb.watch/78Bcv_V9hh (Photo: Business Wire)
The COVID-19 pandemic has severely impacted societies and industries. This New Normal forward has accelerated certain digital trends in healthcare, supply chain, consumers and work, where some of these trends are likely to be permanently shifted. “The pandemic changed everything, including the startup and investment landscape. This is a paradigm shift,” said Kevin Yu, Founding Partner of Taiwan Accelerator, the organizer of X-PITCH Asia Summit.
The total investment amount of global venture capital has repeatedly hit new highs under the pandemic. However, the number of early stage deals has dropped sharply because venture capitalists have been betting more money on unicorns and mature startups that are less risky. “Investors today are more conservative than ever before, and they expect startups to be less dependent on injection of new capital for growth and prefer business models that are more self-sustainable,” said Julius Yeo, Managing Director of Asia at Starburst (Singapore). Some opinion leaders have warned that in the long run, this is not a healthy phenomenon for the entire ecosystem. “Someone needs to fill this gap, and seed accelerators are expected to play a more important role. We will launch a new fund soon, and plan to increase the number and size of early-stage deals, especially for pre-seed startups,” Kevin Yu further added.
As investors shift their focus from market-fit to pandemic-fit products, startup founders must be able to identify new trends in technological innovation. “Digitization enables more small businesses to have bigger growth and new sources of income, helping them to solve financial difficulties during the pandemic. Recently, there is a popular local live streaming app that helps mini-stores sell their products online,” said Edward Paul Apigo, Senior Technology Transfer Officer of the Philippine Council for Industry, Energy, and Emerging Technology Research & Development of the Department of Science and Technology (DOST-PCIEERD).
Meanwhile, some mature startups changed their market strategy in the response to the new normal. “Indonesia itself is a huge market. When international trade is interrupted, startups move back to the domestic market from abroad, unexpectedly bringing good results. Some marketplaces, like Tokopedia, have accelerated this trend by helping small-medium businesses access a wider base of customers online,” said Agustiadi Lee, Program Head of Innovation Factory.
Incubators across Asia actively promote digital transformation. “We worked with local Vietnamese startups to establish a crowdsourcing platform. The platform is built to leverage the power of the private sector to solve problems caused by COVID-19,” said An Ha, Director of International Relations at Business Startup Support Centre (BSSC).
Governments also play an important role in facilitating such efforts. “During the pandemic, India’s government has invested significant resources in education and telemedicine especially, as well as helping traditional industries carry out digital transformation,” Dr. A. Balachandra, Senior General Manager of VIT-Technology Business Incubator. “Malaysia’s government has actively put public services online, so that people can easily and quickly solve pandemic-related matters with their mobile phones,” Ryan Chan, Head of Global Business Development at Malaysia Digital Economy Corporation (MDEC) further added.
Regarding cooperation between the public and private sectors, Kevin Yu of Taiwan Accelerator suggested that the government should work more closely with talented and innovative startup companies. “The pandemic changes much faster than new product development, bottom-up approach may be more effective than top-down.”
The Summit (replay: https://fb.watch/78Bcv_V9hh) is the inaugural event of X-PITCH 2021, the X Games for startups. The theme of X-PITCH 2021 highlights the New Normal in the post-pandemic world, participating teams should focus on applications and services that enable digital transformation around five major categories of the New Normal, TOP 3 teams will win up to US$1 million investment. Application deadline is on August 31, founders from Asia and worldwide are welcome to sign up: www.xpitch.io