Amid a barrage of bad news about the lasting impact on society and the economy of the coronavirus outbreak, it is time to look for any positives that can be found – and how investors can champion these to transform lives.
At Fuse Venture Partners we are helping scaleups refocus their growth plans or consolidate to reflect this new reality. We are also looking at where we can invest.
Sectors set to flourish
We expect our long-term themes of mobile first and online consumption to continue to accelerate in this environment. Certain sectors are destined not only to survive but thrive, such as digital health, home entertainment, fitness and education, delivery-based consumption and services that enable remote working.
Work From Home (WFH) here to stay
In the world’s biggest WFH experiment, SaaS-based communication and productivity tools are helping facilitate the transition. The benefits of working from home are being noticed on a large scale and are habit forming, indicating that they could stay post-crisis – including reduced travel, a more efficient real estate footprint and a broader geographic range for hiring people.
We are seeing the impact already. Microsoft Teams, Cisco’s WebEx and Zoom have seen over 100% growth rates. Slack added 7k new customers in the first quarter, a 40% uplift.
Entertaining at home
People are turning to social media to stay connected with friends and loved ones. This creates opportunities for innovation both in functional products and user interfaces – examples being TikTok and Houseparty.
Similarly, subscription video on demand (SVOD) is seeing increasing use alongside with video gaming systems. Netflix is now valued at nearly $200bn while Steam has broken its all-time record for concurrent gaming users at more than 20 million users.
As more companies are coming out with platforms, the race is on to see who can provide captivating content to users around the globe. Interesting startups will emerge in adjacent spaces like VR / AR that will unlock new ways to engage with this content.
Technology has played a massive role in tracking, mitigating and improving the situation around the current crisis. The unprecedented situation has allowed existing technologies to find new use cases and has demonstrated the need for rapid innovation across many sub-verticals.
Medical technologies such as chatbots, disease tracking and telemedicine can have a transformative impact on society. Chatbots and advanced AI have received a lot of investor interest due to their ability to drive efficiency in medical professionals’ time. In the future, centralised disease tracking and maintenance of health records on a global level may even outweigh previous concerns around privacy.
For telemedicine startups, there is a tremendous amount of green space to prove the value proposition. For example, the volume of virtual visits roughly doubled for AI-enabled telehealth platform 98point6, and virtual clinic usage at Amwell has surged roughly 40% since the start of the outbreak.
Home school tech
Remote education technology has been steadily improving as students in most of the developed world have had access to decent internet and computers. Until now though, these have largely been viewed as supplementary tools rather than wholesale replacements for in-class learning.
As schools and universities around the world have had to make the sudden shift to adopt remote education in the face of the COVID-19 crisis, the high fragmentation of technologies and educational bodies has meant a large number of platforms and apps have been utilised. This is a chance for education consumers to coalesce around the technologies that have been shown to perform best.
With gyms closed, consumers are taking advantage of more at-home fitness. The average hours spent on mental health and fitness apps spiked about 30% in US from December to March.
We expect demand for sleep tech and other wearables to go up as a result. Consumers are seeking live and social experiences. We expect these apps to adapt to become B2B as well as corporates seek solutions for the physical and mental health of their employees, negatively impacted by prolonged isolation.
Technological innovation has both supported us through this crisis and will be driven forward by our shared experience of it. Humanity is an adaptable species. History shows that we learn from global financial and health disasters and seek solutions.
The interconnectedness of society, helped by the communications tools we have all come to rely on, means that like never before, those solutions can be shared both in purpose and application. This is not to say that the road ahead will not be hard; it will be. But we should press on trying to make the world a better place, progressing the evolution of services that will support us all in post-crisis, while simultaneously creating value.