Impact of COVID-19 on Kenya’s Startups
COVID-19 impacts in Kenya has stretched beyond the sphere of healthcare and the spread of the actual virus, as economic development outcomes are to be seriously affected by the disruption caused both globally and locally.
Kenya has the highest number of recorded cases of Covid-19 in East Africa. Despite various confinement measures, infection numbers continue to rise. Virus cases have mainly increased due to intra-county movement of people, poor hygiene and lack of adherence to government measures.
This period, investment pace in the country slowed down significantly as the government worked to ensure the citizens are protected from the virus. Customers spending habits reduced significantly until later when things have started to normalize slowly.
But what made the investors step back? Visibility into the future during this period was and still is very unclear, therefore a slowdown in investment processes and decision being of no exception.
But what should we expect moving forward? Seed and pre-revenue stage investing will likely see an increase, as investors look to Founders that come up with innovative solutions in these times. Could you be among the creative founder or patient investor?
Can startups still manage to navigate the current situation? Yes! If they can figure out how they can reduce cash burn and increase runway as soon as possible, then why not?
Even as the economy starts to open up once again, it’s the time investors and entrepreneurs looked for opportunities presented by the pandemic and innovate their products around that. This is because, after this period, investors will be out to look for startups that were resilient enough to survive these months of uncertainty.
Could you be a startup and already mapped out 2020 plans? You don’t need to, as it’s right time you reevaluated operations in a bid to reduce costs. Even as people work from home, startups can use this period to position themselves in future.
With every business being affected in a way or the other, it’s essential to understand that resilience of the business models, the resourcefulness of the teams, and responsible cash management of the companies are on the test. The crisis will end, but are you ready with the right interventions to kick-start the businesses and the economy?
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