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Some start-ups emerge lockdown winners

Paran Balakrishnan | Updated on June 09, 2020 Published on June 10, 2020

Cashing in on the opportunities the lockdown has thrown up   -  istock

Apart from being well-funded, their success comes from being in the right segment and seizing the opportunity

For Abhishek Nehru, these lockdown days have been busier than ever. The co-founder of barely-year-old logistics support firm Ripplr, which distributes to retailers, has been pulling in giant new clients like Reckitt Benckiser. It’s also been doing brisk business with relatively new customers like Tata Consumer Products and Dabur despite losing a big chunk of its staff to the migrant exodus.

These are tough times for pretty much every corporation. Even the biggest firms are hoarding cash either to weather perilous days ahead or for predatory raids on smaller companies suddenly facing hard times that might be bought for throwaway prices. Inevitably, the slowdown and ensuing cash crunch is also taking a terrific toll on India’s ambitious young start-ups, many of which live from one funding round to another.

But for a luckier group of start-ups, business is booming in a way they hadn’t dared hope despite various challenges. In Ripplr’s case, the company faced the loss of van and scooter drivers. “We had only 40-50 per cent of our staff as they’d joined the exodus to villages,” says Nehru. “We promised to keep paying them. But a kind of panic set in.”

He notes, though, there were pluses during lockdown. While many stores didn’t open, ones that did placed bigger-than-usual orders. Also, thanks to empty roads, Ripplr’s vans could race from one store to another in record time. The firm has grown seven times since December.

For lockdown winners, it’s all been about being in the right segment. In the travel-and-hospitality trades, even high-fliers like Oyo and Makemytrip are facing tough times as the industry has tumbled into a hopefully temporary abyss. At the other end of the spectrum, conditions are perfect for sectors like edtech and e-commerce.

And now we’ve moved to the “unlockdown” stage, firms like Zoomcar, which offers self-drive cars, has found business accelerating swiftly. But it’s also tailoring its line-up to the new circumstances, looking at offering cars people will use for several months rather than a day or two. Similarly, bike-sharing start-up Bounce and e-bike firm Micro-mobility, seen as preferred modes of short-distance transport for the future, are offering longer-term plans.

And look at EV scooter start-up Ather Energy which has almost reached the “too big to fail” status in its category. Ather’s sitting pretty with $100 million raised from Hero Motocorp and another $20 million from different sources and it’s on track to launch in around eight Indian cities, including Delhi, Pune and Hyderabad, by year-end.

Ather’s hoping the “Covid-19 Effect” will give its fortunes extra propulsion. “All research shows there’ll be a resurgence in need for personal vehicles. Even if two-wheelers get a fair share, it’ll be good,” says marketing director Nilay Chandra. Ather’s bosses are also hoping the pandemic will push buyers towards the electric segment. “Covid-19’s made people more aware of nature. We’re hoping customers make different choices,” Chandra adds.

One sign of Ather’s confidence is it’s getting ready to launch a new vehicle, the 450X, that at nearly ₹1.45 lakh will be over one-third costlier than petrol-engine scooters. Keeping in mind how the market’s evolving, Ather’s also tied up with bike-rental platform Bounce which would involve scooters being rented out on days when owners aren’t using them, considerably lowering ownership expenses. After all, in a pandemic-engulfed world, buyers may become more cost-conscious. But even companies doing better-than-expected during the lockdown have faced all manner of problems. Ather’s having difficulty cranking up production because its components suppliers still aren’t at full throttle.

Monitoring human body

Healthcare’s a sector where Covid-19’s impact is being felt even more directly. Look at Dozee, a just-out-of-the-blocks start-up which is finding its healthcare monitoring devices suddenly in big demand. Founder Mudit Dandawate was obsessed with racing cars in his IIT-Bombay days. He and a few others designed vehicles which raced at Silverstone in England and he even created an electric car.

Dandawate’s racing-car obsession led him to work with a US company on vibration-measuring devices in race-car engines and tyres. His Eureka moment was when he realised almost the same technology could be used for monitoring the human body. Says Dandawate: “This is an outflow from race-car engineering. In race cars, we monitor vibrations from the engine and tyres. There are micro-vibrations in the heart walls, for instance, so I thought, ‘Why can’t we use similar devices to monitor them?’”

Dozee’s AI-powered thin sensor sheet can be put under a patient’s mattress and uses sleep patterns, resting heart rate, resting respiration rate, heart rate variability, body movements and snoring to monitor people’s health. He says its key selling point is it offers 98.4 per cent, medical-grade accuracy. In Covid wards, it allows doctors and nurses to keep track of patients remotely, crucial with highly infectious patients. Says Dandawate: “In two minutes, you can convert any bed into a step-down ICU bed at one-fifth the cost.”

Dandawate’s company is four years old but it only began selling in the market 11 months ago and has been making 500 devices a month. That’s moving up to 2,000 devices from next month. Says Dandawate: “Covid-19 has been a catalyst. What should have happened one year down the line’s happening now.” Dozee sells its devices to hospitals for around ₹14,000 and the model for individuals at around ₹7,500. It’s mainly aimed at people with cardiac issues and sleep apnoea.

In the not-too-distant future, Dandawate will be looking for funding to market his product outside India. Incidentally, he’s also been turning his talent as an inventor in a totally different direction. He’s invented a cricket bat for which he “redesigned the downward component of velocity” which, crucially, reduces the time for the wicket-keeper and close fielders to catch the ball before it hits the ground.

In the Covid-19 world, other sectors have also emerged winners. For starters, there’s telecom because people are spending so much time online either working from home and/or binge-watching Netflix and the like. Or look at companies like Grofers and Big Basket in the online grocery segment. The segment is expected to do $3 billion in sales this year, up 75 per cent from the previous year. Food-delivery companies like Zomato and Swiggy, which hit a road-bump when restaurants shut, have also turned to grocery retailing.

So did these start-ups become success stories while others face collapse thanks to some special market savvy? As in so many instances, it’s mostly been about luck and seizing opportunity. The winners also have one common attribute. They’re all reasonably well-funded and not living close to the edge financially so they can weather the storm and even profit. In downturns like these, cash is king. That maxim’s showing itself to be truer than ever in this time of crisis.

Published on June 10, 2020
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