As every significant historical moment has its own powerplays, a shift in business models, and societal adaptation to a new norm, the same applies to the COVID-19 new world order.

Much has been said that technology companies are the true winners, but the question is: who are the winners and losers in the new world order driven by COVID-19?

Video conferencing platforms

Digitalisation begins to fit itself into the new rhythm of daily life as governments implore their citizens to work from home and reduce physical contact. Video conferencing platforms have instinctively become the all-encompassing go-to-service, no longer centred on webinars or chats only.

It does appear that platforms like Skype, Google Hangouts, and Zoom may emerge as the true winners, given the “new normal” that almost all governments and CXOs’ are purporting now, especially in regards to how businesses will be conducted in the long term.

The flip side: These platforms are not built for highly confidential or sensitive environments. Amidst its newfound fame, Zoom has come under heavy scrutiny over how it handles breaches in privacy due to the prevalence of “Zoombombing“.

We then see the very same video conferencing organisations scrambling to create temporary patches to tackle malware and improve security before they are subjected to headlines again (in a different light this time around).

Verdict: Short-term winners

Food delivery platforms

The popularity of food delivery is not fading anytime soon, notably with more people being self-quarantined. Aware of consumer sentiments, increasing F&B outlets have begun to offer delivery services online.

In response to a surge in unprecedented demand and supply, as well as health risks, food delivery companies like Uber Eats and Deliveroo, among others, have launched contactless “leave at your door service” to help drivers and customers adhere to social distancing guidelines.

The flip side: The Platform-to-Consumer Delivery business model involves operating risks with high costs for delivery and supply logistics. Moreover, such platforms are easily abused.

In the West, GrubHub, DoorDash, Postmates, and Uber Eats were sued for allegedly violating the US antitrust law by imposing “exorbitant” fees to process delivery orders.

Also read: Understanding the economics of food delivery platforms

Eating out is also beyond consummation, but a way humans socially interact with each other. So, unless these companies change their business models, the business boom they are enjoying maybe fleeting as restaurants and consumers alike shun these services as dine-in businesses re-open.

Verdict: Undecided

E-commerce

Market research company Nielsen has identified six key consumer behaviour thresholds tied to the COVID-19 pandemic. With people adjusting their purchasing habits, the e-commerce order volume has increased by nearly 50 per cent since the end of April, according to logistics vendor Narvar.

Compared to March 2019, transaction volumes have increased by 97 per cent for home products and furnishings, 97 per cent increase in online gaming, 136 per cent for DIY products, 163 per cent for garden essentials, 26.6 per cent for electronics and 18.6 per cent for telco.

The flip side: Online retailers who once pride themselves on efficiency are now buckling under pressure to keep up with the crush of coronavirus-related orders. Amazon is stuck between hiring additional workers and granting workers paid-time off if they feel unwell.

The inability to strike an ideal balance between demands for physical goods and employees’ emotional wellbeing is not a problem to be ignored as it can affect a company’s growth. The behavioural change as a result of COVID-19 on offline to online shopping cannot be ignored as consumers begin to experience the convenience that e-commerce brings into their lives.

E-commerce players must start to acknowledge that they are no longer the alternative but the main player in consumer shopping and this goes to making sure they build an enduring business and organization to support their alleviated status.

Verdict: Winners

Medtech startups

Real innovation always comes about as a result of the urgent need to solve a crisis this is especially so for the health care industry. Public healthcare systems around the world are leaning on providers of digital health technologies, particularly telehealth solutions to tackle the coronavirus pandemic.

Ping An Good Doctor, one of the largest telehealth companies in China, reported a 10x increase in newly registered users after the emergence of COVID-19.

In Seattle, TransformativeMed — a company focusing on electronic health record (HER) usability — offered its COVID-19/Core Work Manager (CORES) app to Seattle-area hospitals and medical centres free of charge.

In light of the current situation, Raj Prabhu, CEO of Mercom Capital Group, highlights that we should anticipate funding trends to shift among digital health technologies.

The flip side: Analysts have pushed forth that not every digital health company will thrive in the post-pandemic world. StartUp Health suggests that “health innovation investments are favouring entrepreneurs whose solutions either have a direct impact on a pandemic response or have a place of relevance in a changed world”.

Medtech startups such as InnAccel, which developed an automated and closed system for clearance of highly infectious oral secretions, might be the true winners as they have an added advantage with their flexibility to adapt their business models quickly against black swan events, offering a unique value proposition that can withstand periods of uncertainty.

Verdict: Winners

Travel industry

It is indisputable that no other industry has fallen as far and as fast as the travel industry. The World Travel and Tourism Council reveals that recovery could take up to 10 months. As a ripple effect of the three-month loss in global travel, the lodging sector is severely affected too.

Jumbo hotels in Nevada and Las Vegas have lost their vibrancy. Travel booking startups like Klook will be laying off staff, placing employees on temporary leave, and implementing a company-wide reduced workweek.

Airbnb, the once-heralded disrupter scheduled to go public in 2020, is laying off 25 per cent of its workforce and witnessing a collapse in bookings with hosts pulling out to find cheaper long-term tenants. The tourism industry’s financial strategy built on the foundation of a trouble-free future of open borders and high tourism demand has thus failed them.

Also read: Compassionate layoff — Airbnb shows the way

The flip side: Before the pandemic, the total contribution of travel and tourism to the global economy in 2019 was a whopping US$9.25 trillion, registering a CAGR of 5.6 per cent from 2019-2026.

The need for business travel and social travel will not diminish even as technologies for virtual interactions increase in popularity or attainability. In a business sense, face-to-face interaction builds relationships and enhances credibility and trust.

From the perspective of any consumer, nothing can take away the novelty of experiencing a new city by themselves. The travel sector may see challenging times this period, but it would not be long before they reignite in the most explosive fashion post-pandemic.

Verdict: Losers

So, do we know who the true champions are?

There is no straightforward answer or crystal ball to predict who the ultimate winners and losers are. Rather, the pandemic has taught us three important lessons in order to achieve self-enablement and self-sufficiency in a dynamically changing world.

• Flexibility to reinvent business models centred around network effects

Given the unpredictable environment that affects the industries or markets we once look at, we must be able to determine the next business model to rely on or replace with in order to stay relevant amongst new realities.

• Having sufficient capital and comprehensive back-up strategies

It is crucial to keep a steady runway, which allows us to take advantage of any opportunity for recovery and upturn the soonest it happens. We should never rest on our laurels.

• Innovation and adaptation

The rubric for measuring or defining a new norm in the post-pandemic world is still being fine-tuned. Yet, it is safe to say that we are still living in a competitive landscape driven by disruptive business models. Circumstances that benefit us at a particular moment can also bring about our untimely end.

We should adopt a growth mindset and constantly innovate. In doing so, we develop the adaptability and resilience to face challenges as opportunities, valuing the processes and learnings that emerge from it.

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Register for our next webinar: Fireside chat with Paul Meyers and Jussi Salovaara

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Singapore’s cybersecurity startup Responsible Cyber acquires digital identity wallet Secucial

Responsible Cyber (RC), a Singaporean cybersecurity startup that manages software security for small and medium businesses, has acquired Secucial, a startup building a digital identity wallet.

The acquisition reportedly values Responsible Cyber at US$4.9 million.

With this deal, RC has roped in NUS Enterprise and Singtel Innov8 as its new shareholders.

NUS Enterprise and Singtel Innov8 are the co-founders of ICE71, which stands for Innovation Cybersecurity Ecosystem at BLOCK71, and is the region’s first cybersecurity entrepreneur hub.

Secucial was part of the first cohort that graduated from ICE71 Accelerate, a three-month accelerator programme designed to help early-stage cybersecurity startups achieve a product-market fit in a unique technical and demanding industry.

The startup is also part of the ICE71 Scale programme, which helps international and local cybersecurity startups seize opportunities and grow their businesses in Singapore and within the Asia Pacific.

With the COVID-19 pandemic gaining momentum, Responsible Cyber aims to arm small and medium business owners with comprehensive cybersecurity support through its platform.

Also Read: Imbalance between work and personal life is a cybersecurity issue

gojek joins forces with Deliveroo, Advo, Ebb & Flow to provide delivery jobs for drivers

gojek Singapore announced today it has signed agreements with several organisations, including Deliveroo, Advo, and Ebb & Flow Group, to provide delivery services and create additional earning opportunities for its driver-partners during COVID-19.

Under the partnership with Deliveroo, gojek driver-partners will take on roles which involve picking up meals from restaurants and delivering it to customers as ‘circuit breaker’ period increases the demand for eating at home.

The drivers will service districts around Central Singapore, comprising Bukit Merah, Queenstown, Toa Payoh, and Geylang.

The ride-hailing company is also collaborating with Singapore-based education financing startup Advo, to deliver more than 2,000 meals to vulnerable and financially-needy single-parent households in Singapore.

Named #FeedaFam, the initiative by Advo is supported by food and beverage (F&B) partner, Ebb & Flow, a homegrown technology-driven F&B company.

gojek driver-partners will pick up freshly-cooked dinners from Ebb & Flow’s cloud kitchen and deliver them to the beneficiaries identified through Advo’s partnership with charity organisation HCSA Community Services (Dayspring SPIN).

Razer Fintech launches digital hackathon targeting youth

Razer’s financial technology arm Razer Fintech is launching its first-ever digital hackathon in Singapore, scheduled from May 15, 2020 to May 17, 2020, as a form of support for youth and local startups during the COVID-19 crisis.

These objectives are in line with the US$50 million COVID-19 Support Fund announced by Razer on April 9, 2020.

Also Read: Razer Fintech leads consortium for youth-targeted bank as part of digital banking license bid

The Razer Fintech Digital Hackathon will encourage Singapore tertiary students, young professionals, and the startup community to address critical financial challenges that have been exacerbated by COVID-19.

Winning participants will have the opportunity to implement and operationalise their original banking solutions within Razer Fintech’s financial services ecosystem or with its partners, through securing full-time employment, internships, investments, or commercial partnerships.

Participating teams will be encouraged to solve COVID-19 related financial challenges, utilising the fintech industry’s latest technologies and solutions. Teams will stand to win cash prizes of US$14,030 in total, and other prizes sponsored by Razer Fintech, Amazon Web Services (AWS), Mambu, Visa, PwC, FWD, and Perx Technologies and supported by Singapore Management University and the Singapore Fintech Association.

To participate in the Razer Fintech Digital Hackathon, teams of up to four can register through one of the following platforms by 6:00 pm SGT, May 13 2020:

• Sign up here.
• Email rf_hackathon@razer.com with the team member’s names, mobile numbers, and email addresses.

South Korea’s Smilegate invests in Vietnam’s sales and management platform Sapo

Vietnamese sales and management tech startup Sapo Technology has raised a Series A funding round led by the venture capital arm of Korean game developer Smilegate’s Smilegate Investment.

The round is also supported by Vietnam’s homegrown venture capital Teko Ventures, which already has a stake in the startup.

According to Nikkei Asia Review, Sapo CEO Tran Trong Tuyen confirmed that the investment is seven figures. The Series A funding is said to be used to strengthen Sapo’s footing in payment and business financing, and expand operations in other Southeast Asian markets, Tuyen said.

Established in 2008, Sapo — formerly known as DKT Technology — is a multichannel e-commerce management tool that merges the functions of its e-commerce website tool Bizweb and Sapo sales management software.

Sapo’s other products include Sapo GO, a tool for sellers on Facebook and online marketplaces, Sapo FNB for restaurants, Sapo Omnichannel, as well as delivery and payment units.

Flipkart-backed fitness tech startup Cure.Fit lets go of over 1,000 employees

Cure.Fit, health, fitness, and food startup have laid off 1,000 people in India.

According to Finance Rewind, the company had around 5,000 people in January this year.

Cure.Fit has multiple branches, such as Care.Fit, Eat.Fit, Cult.Fit and Mind.Fit which covers the businesses of health and diagnosis, food delivery and cafes, gym and fitness, and mental health and yoga, respectively.

The India-based company had reportedly forcefully sought resignations from 100 people on May 1. All the employees’ social media chat groups and work emails are shown to be inactive. However, they said the company agreed to pay salaries for 30 to 45 days.

The company’s official statement reads: “We have downsized our employee base across markets where we have shut operations and have initiated pay cuts across levels. The founders have taken a 100 per cent pay cut, the management team 50 per cent and the rest of the staff, depending on seniority, have a reduction of 20 to 30 per cent”.

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Photo by Philipp Katzenberger on Unsplash

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Now that we have reached the end of a long bull run in the financial markets, valuations are coming down, logic and common sense are returning to the streets and hence it’s a great time to reflect on the good, the bad, and the ugly of venture capital.

I wanted to have a brief look at the history of venture capital and ask: What values have been historically important for a venture capitalist (‘VC’) to achieve success?

I will discuss the following lessons learned after doing research and try to reach conclusions that could potentially be used in 2020 and beyond:

1. Entrepreneur first, venture capitalist second
2. Betting on big ideas and solutions have proven to create impact and wealth at the same time
3. Successful venture capitalists are hands-on and not just money managers
4. Successful venture capitalists used to back seed companies and focus more on funding innovation rather than building a bigger fund

Entrepreneur first, venture capitalist second

VCs are nothing without talented entrepreneurs. They would have been left empty-handed if it wasn’t for talented founders such as Jeff Bezos, Mark Zuckerberg, Steve Jobs, Bill Gates etc. (it’s actually a very long list!)

Think about it: what are the chances that a founder finds another VC to back him (sooner or later) versus the VC finding another talented founder? A founder can always find money, but finding talent is a different story.

There’s a large group of people with ideas, but only a few that are talented enough to execute well (I recently wrote an article on what I call the ‘immigrant mentality’ of successful founders).

By going for the ‘market size or idea alone’ with a mediocre founder (of founding team) chances are, little return on invested capital will be generated.

I believe VC should absolutely be actively involved in a company, but the bottom line is that they are not in the driving seat (at least not in the early stages as there are enough examples where a founder was fired), so all their energy should go towards finding the right driver and back him/her as much as he can using all the resources at his disposal.

Betting on big ideas and solutions have proven to create impact and wealth concurrently

Here’s a couple of examples of companies that had no revenue and no business plan when they raised funds. But the talented founders had ideas with large potential.

Now I personally think that most startups in 2020 should have some traction / validation of the business idea before they raise external capital simply because it’s so much cheaper these days to generate traction than it was in 1970, but let’s look at the examples:

• Genentech: no business plan and no proof that their methods would work. Launched in 1976. Raised $250k from Kleiner Perkins. Valued at $48.8 billion in 2009. Created the blueprint for modern DNA technology.
• Intel: had a two-pager business plan full of typos in 1968. Started by 3 talented founders. Arthur Rock invested (together with a few others) $2.5 million. Roughly 75% of all computers have an Intel chip in 2011. Total market cap: $244 billion in 2020.

Also read: In conversation with Will Klippgen and Michael Blakey of Cocoon Capital

Sure, there are thousands of other companies that were successful and deliver returns. So it is close to impossible to create a complete list and so the above are extreme examples in away.

However, the bottom line here is that a VC should scroll to the ‘addressable market size’ in the pitch deck to find out if the problem is massive enough, directly after he has established that the founding team is great.

Successful venture capitalists are hands-on and not just money managers

In order to build a successful company, a founder will need to pull in all the resources he can find. This means that a VC should be selected on whether they can add value beyond providing capital.

A good historical example:

• Atari was founded in 1971. Had initial success with arcade video game ‘Pong’. Wanted to launch a home video game console in 1975 but was struggling to get it sold and raise funds. Sequoia funded Atari, but more importantly, they brought them their first customer to enter the (rapidly growing) consumer market for home video games.

I recently wrote an article here on how VCs should provide more beyond capital and should not just be fund managers. VC have resources such as network and knowledge that a company needs to succeed.

Where VCs are not providing the hands-on resources needed to grow a company successfully, this void is filled by angels, some family offices and venture builders who have limited resources.

Successful venture capitalists used to back seed companies

Historically speaking, as discussed before, many successful companies received funding from VC before they had any revenue or traction. The VC simply believed in the founder, the potential market, and was focussed on ‘funding innovation’.

Besides the examples provided above, there are limited data available on the past 50 years, but in 2010, approximately 15 per cent of US Series A invested startups were making revenue, which has now risen to almost 70 per cent. This, in turn, has corresponded with survival rates from Seed to Series A halving, to less than 4%.

Source: Pitchbook

The problem here is that talented founders with great ideas need to rely on angels, venture builders, and family offices for a long time where there are historically fewer resources available. This then leads to a fall in the survival rate of seed companies that make it to venture capital.

We have created a catch-22 for some founders: startups raising seed rounds feel the pressure by having to prove traction and product-market fit more vividly but at the same time they need resources to find that same traction and product-market fit.

This increase in investment standards by VC (partly) leads to fewer founders starting new companies:

Source: Crunchbase

I realise the numbers might not reflect the complete reality as one can claim that the fact that fewer founders start a company means that the ‘bad’ ones don’t even venture out and try. One could say that’s market efficiency.

However the problem with that is that it is likely not going to be limited to the ‘bad’ founders, but even the talented ones might avoid starting.

At the same time, it looks like VC as an industry is barely able to outperform the S&P 500 over the past decades.

Source: Pitchbook

According to the Kauffman Foundation:

‘Blame high fees, a skewed compensation model and inattentive trustees for the problem, Kauffman says. Venture capitalists may say they’re all about financing innovation, but nearly all of them follow the standard format of charging a management fee of 2% of assets plus 20% of any profits. That gives managers an incentive to build bigger funds, Kauffman says, even though industry research shows that funds over US$500 million tend to have dismal results.’

‘Only 16 of 94 funds provided a return of 5 per cent a year above small-cap stocks, and most of those were funds started before 1995.’

The important historical lesson remains: VCs need to bet as early as possible taking the risk to create impact and wealth before considering increasing investment standards, raising bigger funds and letting angels, family offices and venture builders be the gatekeeper as it might not be the best for future returns.

My opinion is partly fuelled by the fact that there’s going to be even less capital available in the seed rounds due to the COVID-19 crisis, while at the same time founders won’t stop and try to innovate.

So if a VC doesn’t invest earlier, his deal flow might dry up. I wrote about this before, however, at the time I purely looked at the COVID-19 crisis and its impact without looking at the historical perspective.

What values have been historically important for a venture capitalist to achieve success?

• Finding the right founder (or founding team) is critical
• Addressable market should be the second most important metric after the founder while evaluating a company
• A VC should carefully consider that they can add value beyond providing capital before making the investment decision
• The resources of a VC are needed as early as possible and they need to consider this before they are increasing their investment standards, focus on building a bigger fund or let ‘others’ be the gatekeeper

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Register for our next webinar: Fireside chat with Paul Meyers and Jussi Salovaara

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We’re now living in unprecedented times. Step by step, the circumstances surrounding the global health crisis are changing, transforming the way we work and live. Technology has taken centre stage in the success of many companies.

Financial institutions were not quick to warm up to the benefits of embedding technology into their compliance processes, but it is finally happening. Innovation is happening faster than ever before, in real-time.

KPMG reckons that, by the end of 2020, RegTech — compliance technology — will make up 34 per cent of all regulatory spending.

What’s more, it won’t peak there. Spending on compliance technology is predicted to grow by 48 per cent year on year for the next five years. It is clear, compliance departments are about to transform.

What opportunities can increased digitalisation unlock for them in the coming decade?

From reactive to proactive

In 2018, the average Tier 1 banks spent about 20 per cent of its operational budget on compliance and employed 500 compliance staff. But despite the investment and manpower, most banks still struggle with the workload.

When McKinsey benchmarked 24 leading banks — including several systemically important ones — across Europe, Asia, and North America, a majority said their foundational compliance capabilities and controls weren’t as mature as they’d like.

The upshot is that compliance staff often expend most of their efforts on low-level tasks and don’t have time to strategise.

By automating daily routine repetitive tasks, Regtech can significantly cut the low-level workload. The time required for KYC checks, for instance — these typically take one to three months, much to consumers’ frustration — can be cut by 90 per cent: a staggering 5.4 million hours a year in time savings.

Nicholas Melas, an expert in risk and compliance who recently joined our team at ClauseMatch as Senior Implementations Manager, explains: “Automation frees up people. Suddenly, you no longer have to go through spreadsheets line by line, tick boxes, or push paper around. Decisions happen much quicker.”

But compliance technology isn’t just about speed. What’s more important is that, with less time required for low-level tasks, compliance staff can focus on analysis, strategy, and the development of better systems and controls. In other words, they can deliver more value.

Melas puts it this way:

“You need to make the right decisions with the right speed and care. Banks tend to treat all decisions in the same way, which is inefficient and time-intensive. Technology allows you to be more selective. You can filter issues by the level of risk they present and prioritise those that need in-depth consideration and discussion.”

Slashing overhead

If the compliance workload is growing to unsustainable levels, so are costs. Case in point, the General Data Protection Regulation (GDPR) has to date cost businesses US$1.1 billion to implement.

Industry-specific regulations have even higher implementation costs:

• The second Markets in Financial Instruments Directive (MiFID II) has cost over EUR2.5 billion (approximately US$2.78 billion)
• Dodd-Frank — the US’s signature Wall Street reform law — has cost US$36 billion
• Basel III rules — the set of international standards developed following the 2008 banking crisis — are expected to cost between EUR40 million to EUR120 million (about US$45 million to US$134 million) per bank

More to the point, costs don’t end once implementation is over. There are also ongoing monitoring requirements, admin, risk assessments, and regulatory updates to contend with.

Also read: Regulation tech has a lot of challenges but comes with big opportunities

Just as compliance technology can cut compliance departments’ workload, it can also slash these costs. A 2017 study found tech can cut anti-money laundering costs by 42 per cent, saving banks GBPUS2.7 billion (about $3.6 billion) a year. Similarly, when ClauseMatch developed a Proof of Value at Lloyds’ Lab, it found it could slash policy management costs by up to 30 per cent.

These savings free up funds for more investment and better returns for stakeholders. More importantly, they can be passed on to consumers in the form of better rates and more cost-effective products.

Framing the big picture

Technology isn’t just good at taking the sting out of repetitive, time-intensive tasks. AI and machine learning can parse huge amounts of data and connect the dots. In an increasingly complex and challenging environment — and with Brexit now all but certain — this can give banks an edge by providing them with an unprecedented level of visibility into the regulatory landscape.

This is exactly what fintech challengers have been doing. For example, Revolut, one of our clients, sees great potential for AI to scan the regulatory horizon for relevant changes to help assess risk.

Given the immense amount of laws and regulations this challenger bank has to contend with, this approach is of huge help when compliance teams are working across different jurisdictions. Especially now when everyone is working remotely. AI excels at seeing trends it would take people ages to spot.

However, AI isn’t a silver bullet, it’s a tool, not a solution to everything.

That said, in a world where most of your competitors are often too busy putting out fires to think ahead, AI-powered tools can give banks a significant competitive advantage.

Beyond 2020: how will tech transform compliance in a decade’s time?

By 2022, banks will have collectively invested US$76.3 billion in new technologies. For those that take the leap, the benefits will go beyond cost-savings and increased efficiency. More significantly, they’ll place themselves in a better position to unlock the opportunities the new decade will bring.

Technology can help reduce the manual burden, inform, and empower banks’ compliance departments. And the better banks are at compliance, the easier it’ll be to stand out.

Melas puts it this way:

“Technology can help compliance become an inherent part of everything a bank does, which is as it should be. When compliance is embedded into banks’ processes, they’ll be all the better positioned to deliver products that live up to regulators’ and customers’ expectations and work exactly as advertised.”

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Register for our next webinar: Fireside chat with Paul Meyers and Jussi Salovaara

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KoinWorks, an online P2P financing platform for small and medium enterprises (SMEs) in Indonesia, has added Lendable to its cap table after the emerging market debt provider and investor injected US$10 million into it.

This round comes just over a month after KoinWorks raised US$20 million in  debt and equity investment from Quona Capital.

Also Read: Going big? Then Go e27 Pro.

“As a company that focuses on productive sector funding, KoinWorks will aim to strengthen digital SMEs in Indonesia, with the support of thousands of retail lenders and other financial institutions that have been working together with KoinWorks to boost the growth of digital SMEs, particularly during this pandemic,” said Co-founder Benedicto Haryono.

KoinWorks provides a Machine Learning-based platform to connect lenders and borrowers. On the platform, both parties can fulfil their needs of either gaining maximum returns every month or getting an affordable online loan.

The firm claims that it currently has 400,000 users in its platform, with almost 220,000 lenders.

KoinWorks has previously raised US$1.4 million in Series B2 round from Japanese financial services company Saison Capital.

Special Initiatives

The lending platform has initiated several programmes to support digital SMEs in Indonesia. They include #LokalSupportLokal, a microsite which involves public, brands and media to donate their social media pages to promote products offered by SMEs.

In partnership with East Ventures, KoinWorks also recently completed a donation programme, called KoinDonasi, for test kits and genetic research upon COVID-19 vaccines.

Also Read: [Updated] Indonesia’s KoinWorks raises US$20M from Quona Capital

Previously, the company offered educational loans, with plans to launch eight new services in 2020, including gold saving, according to Jakarta Globe.

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In our legal work, we found that many technology companies tend to neglect to protect their intellectual property assets. It can be embarrassing for founders especially when they’re fundraising.

If it was discovered during legal due diligence by venture capitals or investors, you may also lose some contractual leverage.

I mean, if you are a technology company, what else would be more important apart from your team if it’s not your intellectual property assets?

First, intellectual property (IP) assets refer to a set of legally recognised assets under the law such as copyrights, trademarks, industrial design, and patents, and so on. But in this post, we’ll focus on copyrights and trademarks as they seem to be more common IP assets that generally apply for many technology companies and startups.

Let’s take a look at the simple steps on what to do below.

Do you own your technology?

It is crucial for technology companies to ascertain if they actually own the technology.

Also Read: What tech startups need to know about Intellectual Property in China

For instance, when an early stage company is just starting out, it may have outsourced certain product development to a third party such as an outsourced software developer (as opposed to developing the MVP or prototype in the house).

In this case, everyone needs to sign the necessary IP assignments for the company. This usually includes all developer, service, any business agreements with another party, and in all employment, consulting, or advisor agreements to the company.

Have you protected your technology?

Usually, the most important intellectual property asset for a technology company relates to its source code.

In every country, there is an intellectual property office that is in charge when it comes to filing work. For example, under Malaysian laws, a company can protect its source code by voluntary filing to Malaysia Intellectual Property Office (MyIPO).

Source code such as lyrics or manuscripts falls within the scope of a “literary work” under the Copyright Act 1987.

This is different from a trademark which refers to a sign, design, or expression which identifies products or services. Like copyright, to protect your trademark, you need to do a trademark filing to the regulator. This can be done by engaging a trademark agent or by self-filing.

Before filing, the standard practice is to do a search on the current database and see if they are any similar trademark filing that may have been done over a similar name or logo. A good trademark agent would be able to highlight your prospect of succeeding in a filing application or if it may be better if you change your name.

Also Read: Screwing up IP law is an easy way to doom your startup

As a technology company or startup, you also need to decide on the level of protection. The protection is territorial in nature. In other words, you need to file a separate filing in every country that you wish to protect your IP assets.

In Malaysia, previously a company may be required to engage a trademark agent to do filings in every country that it seeks to be legally protected. But thanks to the newly-amended Trade Marks Act 2019, companies can now file worldwide protection over its trademark by a single filing to the regulator.

You should speak to your legal counsel on whether you should do worldwide protection.

How do you monetise your technology?

When it comes to monetising your IP assets, for a technology company, you need to demonstrate proof of your IP ownership. So if you have an unclear IP assignment, it may be more difficult for you to monetise your software or services.

Owning a technology itself does not automatically generate money for a business. A technology company generates income by licensing the use of its certain software such as ‘Software as a Service’ (SaaS) which can be a B2B or B2C solution.

This is where having a licensing agreement or even a term sheet in place can help save cost and time.

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COVID-19 is a black swan event and it fundamentally changes the way we pursue Machine Learning in the real world. For businesses facing these rapid changes, the AI/ML models currently live in production are trained off of data that is very different from today’s pandemic situation.

A simple example is, a huge reduction in commercial flights might mean a drop in the accuracy of weather forecasts. Large-scale weather forecasts are made using sophisticated computer programs that model a virtual world. The accuracy of the output of such a model depends on the quality of the input.

One of the usual sources of input is an aircraft, feeding back real-time wind data. COVID-19 has considerably reduced the number of aircraft operating. As a result, the incoming information has dropped and forecast winds at cruise height can no longer be verified and the feedback loop into the global model is much weaker.

Similarly, finance models (used for credit analysis, asset pricing, demand forecast, etc.) taking unemployment data into consideration will see some extreme input variables never seen previously. A look at unemployment data that was just released this week. The reading of 17 million people filing for unemployment is four to five times the next highest reading and a more than 25 times sigma event.

Any model using unemployment data as input and making a decision on this data is using a feature that is more than 25 Sigmas outside of the expected value. This is an event that would be calculated to happen once every 100,000 years!

A model working on this input is unable to handle every unexpected event perfectly and give an accurate response.

Also Read: This Machine Learning startup helps breast cancer patients customise treatment, predicts risk of recurrence

ML models are trained on previously seen observations to predict future scenarios. However, today these models are seeing events different from what they were ever trained on.

Many businesses (especially in credit and finance) have hundreds to thousands of live production models running in their organisation, making incorrect decisions on data that affect their business outcomes across sectors – health, business, finance, gig-economy, credit, commerce, auto-traffic and travel to name a few.

The models that are likely to have problems in the coming days or months span credit, home pricing, asset pricing, demand forecasts, conversion/churn models, supply-demand for gig companies, ad pricing, in addition to several others.

With that in mind, it’s important to think about the model observability, overall systems resilience to these inputs, and the ability to troubleshoot as issues arise. The most important thing is for teams to have models that are observable; if you can’t observe, you can’t adapt. This means having instrumented detection+analysis on model decisions.

As a rule of them for model observability It is important to look out for the following:

• Events that are outliers should be detectable and surfaced automatically
• Outliers events should be linked with analytics for troubleshooting the model’s response
• Monitoring distribution shifts in input data because of these events
• Robust splicing and filtering capabilities for model input

Also Read: Differences between AI and Machine Learning, and why it matters

Input Variables:

Key Input-level monitors that an AI/ML model should have in production while factoring in the black swan events:

• Input checks to determine if values and distributions of features are drastically different than normal benchmark periods
• Checks on single events or a small number of recent events detecting out of distribution issues
• Detect if the features your model is most sensitive to, have changed drastically and factor that in accordingly
• Statistics to determine how far off the features are from the training set

Model Response:

Once you know the input to a model has changed, the next thing to monitor is how the model is responding to extreme inputs.

• Check the model’s performance for specific subclasses of predictions. Certain sectors such as Energy, Airline, or Travel might have significant risks. Best is to have fast online checks against various groups of predictions
• Use prior periods to produce worst-case and base case scenarios to then compare against outcomes
• Monitor the predictions in real-time against every new truth event (real-world prediction feedback) you receive
• If real-world feedback is not possible due to time lags, use proxy metrics — things you can predict and measure to determine the models’ performance

Also Read: Differences between AI and Machine Learning, and why it matters

Overall best practices:

The best practice for production ML models is not far off from best practice for production software — building observability tools to understand what is happening when models or software is live to catch issues before it impacts your customers. Some best practices for production ML models during these extreme environments are as under.

Track and identify outlier events

Tracking input data and model performance on outlier events is key. Annotating these events and being able to filter upon outlier events can help when gathering training data for future extreme environments. It is also important to consider whether to include outlier events in data for future model training. The model will be proactive against future extremes, but it also might think extremes are the new normal.

Decide on a Model Fallback Plan

Understanding how the model has performed in the past during extreme environments can help understand how the model is performing now. If the model is not performing well, it is best to set up naive forecasts based on the last N minutes or N Days and compare the model performance to this naive model.

Find look-a-like events

It is important to have enough observability into past similar events to set up look-alike modeling for this current situation. For example, if your model took in unemployment data as input, you might be able to leverage unemployment data from similar economic downturns, such as the 2008 recession.

Also Read: Survival vs growth: ShopBack CEO shares 3 golden rules to withstand the pandemic

Build a diverse portfolio of models and compare model performance

Real-time models that are reacting to the external world might be performing better today than batch predictions. Having a diverse portfolio of models enables teams to compare model performance and route traffic to models that are reacting better to extreme environments.

Combine various models by ensembling or stacking

Stacking or ensembling different models like tree-based or penalised regression models together would reduce the estimation error of the output and make the forecasts more robust during extreme events.

Know the uncertainty of your model’s predictions

Real-life modelling scenarios can be marketed with the absence of a good model altogether. In these cases, do you know how uncertain your model is? In this case, do not rely on point estimates rather return the model’s predictions with its confidence levels. In extreme periods, the uncertainty band will increase providing valuable information about the unreliability of point estimates

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While running his design-centric online furniture startup Fabelio in Jakarta, Krishnan M Menon used to travel to rural Indonesia a lot.

During these trips, he would visit many Usaha Mikro Kecil Menengah  (UMKMs) or MSMEs located in Tuban, Cirebon and Jepara.

These visits made him realise that while the archipelago has 56 million MSMEs, the technology revolution was only happening in the “premium” Indonesia. The sector and the country would benefit if these businesses were digitised and included in the financial ecosystem.

“I started brainstorming on how to support and accelerate the process of digitalisation. I discussed this idea with Lorenzo Peracchione, my long-time friend and former boss at Lazada. And this led to the birth of BukuKas,” Menon tells e27.

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Launched in December 2019, BukuKas helps owners of MSMEs understand and manage their financial flows effectively with a free-to-use digital ledger mobile app.

“Starting BukuKas reflects our dream to help millions of business owners, who form the backbone of the real Indonesia,” Menon remarks.

Menon, a serial entrepreneur, and Peracchione, who has previously worked in Luxola, had come very close to starting a business together several times, but their plans didn’t materialise. Now, with BukuKas, they found a vision that was very relevant to both of them personally.

“Helping small businesses is a very personal mission for me since I grew up in a family that ran a small agricultural business. I saw my father experiencing problems managing cashflows and collecting credit first-hand,” says Peracchione, narrating the story behind BukuKas.

While Menon has in the past built Freecharge, besides Fabelio, Peracchione helped cosmetics e-commerce startup Luxola to launch its Thailand business from scratch. Following its acquisition by LVMH-owned Sephora, Peracchione built its mobile business in Southeast Asia from the ground up.

Book-keeping made easy

Many small businesses in Indonesia still traditionally manage their finances using pen and paper. Furthermore, they struggle to get visibility and have no clue about the profits they earn.

The BukuKas app provides a simple book-keeping solution that can record sales, expenses, accounts receivable, and debt. It can also send reminders to their customers to pay back.

“The app allows small business owners to save 40 minutes a day as they can now avoid tedious manual calculations and reconciliation,” Menon boasts. “Our users say they manage to improve their profits by 10-20 per cent every month as they manage their expenses better and have an easier time collecting money from customers.”

The startup is now working on several new features that will help MSMEs improve sales, financial services and stock planning.

COVID-19, a blessing in disguise

As of April 2020, BukuKas has signed up over 250,000 merchants. The number has increased by 50 per cent since the outbreak of the pandemic.

“Offline businesses relying on retail outlets have been hit hard by restrictions imposed in light of the pandemic, with several claiming revenue drops exceeding 60 per cent. As a response, small merchants are trying to shift their focus to online channels, especially informal ones like Instagram and WhatsApp,” says Peracchione.

“BukuKas makes it easier to keep track of business activities across different online channels and facilitates remote business management, as users can access and manage bookkeeping anytime, anywhere via mobile,” Peracchione explains.

Also Read: Indonesia’s logistics aggregator Shipper secures US$20M Series A led by Naspers

One key lesson that COVID-19 has taught the founder-duo is that they need to invest more time and resources into understanding and helping merchants better.

“We see our merchants affected by the virus outbreak. To help them out, we have started promoting their business on our social media channels and  conducting English classes for free to up-skill them,” says Menon.

Recently, BukuKas raised undisclosed funding from Surge, a scale-up programme run by Sequoia India; Credit Saison; and 500 Startups. It also has the backing of over 20 angel investors, including Happy Fresh CEO Guillem Segarra, and Kopi Kenangan founders Edward Tirtanata and James Prananto.

“The Surge team truly helps entrepreneurs build great companies. From guiding us through setting up our fundamentals right, to helping us execute on a day-to-day basis be it on hiring, strategy, product or pretty much anything we ask for, to exposing us to incredible entrepreneurs like Tokopedia Co-founder William Tanuwijaya, so we can be inspired and learn from them,” concludes Menon.

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Image Credit: BukuKas

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If you want to get to know the story behind the scenes – the highs, the lows, the struggles, the accomplishments – let’s start at the beginning, shall we?

It all started back when I was working at a bank with an even fancier title, Premier Account Manager (Need I say more?).

But you know that nagging voice in the back of your head? Well, mine was always telling me there was something missing. That I should break away from the nine-to-five grind and just start my own venture.

The trouble is that the voice in your head said, “So what if you don’t have what it takes to pull it off? All you need to do is be the hardest worker in the room.” Here’s the truth – There’s never going to be a perfect moment because it doesn’t exist. You need to make the moment perfect by reaching out and grabbing it with both hands.

So, that’s what I did, I quit my job a month before our wedding and flew to Australia with my newly-wed bride on what was supposed to be my honeymoon. But it ended up becoming a business trip instead.

Thus, I began my entrepreneurial journey, with a bucket list of ideas and a heart full of hopes which I later learned were probably all I needed at the time.

Back when I had travelled overseas for an exchange program, I witnessed first-hand the challenges that international students have to navigate to find a place to stay. It was from these personal experiences that I got the idea for my startup.

Also Read: Dathena closes US$12M Series A led by Jungle Ventures to protect businesses from cyber attacks

We have helped solve the very real problem of connecting students with verified, 100 per cent safe, and secure private accommodation with campus-like facilities for a smooth transition into university life.

A new beginning

The first year was brutal. I worked out of a tiny cabin in Delhi, reaching out to students who were struggling and relying on their word-of-mouth referrals to stay afloat.

My co-founder (and friend) Mayank chipped in from halfway across the world before finally joining me for good. Together, we built a simple listing page on WordPress, and with that, we were officially in business.

How’d we pull it off with zero technical know-how? Well, your guess is as good as mine. That, folks, is how we made it through the first year, oscillating between highs and lows – sometimes all in a single day.

As the year rolled by, the tiny cabin started to get a little too full for comfort. We moved operations to an airy, co-working unit that let us spread our wings, both literally and otherwise.

We were frantically trying to juggle between two worlds, setting up base in India and expanding in the UK.

I still remember when Mayank and I travelled to the UK for the first time, not as tourists but on official business, with back-to-back meetings that ran well into the night and last-minute travel plans that took us to the far ends of the city. We met accommodation providers who’ve now become long-term associates and welcomed interns fresh out of college. And I’m proud that many of them are still a part of our journey– successful managers and senior associates.

Also Read: How startups can harness e27 Pro and push for greater business success

While 2017 was the year of consolidation where we tested (successfully I must say) features that are now synonymous with our services, the year 2018 was undoubtedly the best year for us. We started off the year on a high note by launching our brand-new platform with end-to-end solutions, doubling our workforce, and ended it on an even higher note by establishing a strong referral programme with global universities, delving deeper into Ireland, Korea, France, and New Zealand. Phew, it was one hell of a ride, and I wouldn’t trade it for the world.

A land of opportunity

By the time 2019 had come rolling around, we had improved CRM automation and implemented AI to pre-emptively anticipate customer needs and accelerate user engagement. Since the world is our oyster, we never stopped exploring other opportunities and ended up expanding into the USA and Canada.

Coming to the present year 2020, we’re all aware of the unprecedented crisis that the world is facing. During this time, we have been hard at work, rewriting the playbook for success. We moved quickly in response to the unfolding situation with the global healthcare crisis, from adapting to the new normal of working from home to constantly coming up with new strategies to expand.

We are a tech-enabled platform that leverages the power of AI and ML to address a real-world problem, allowing us flexibility when it comes to working remotely. All of our existing team is developing their cross-functional skills, putting in extra efforts towards their tasks and going out of their way to pitch in where necessary.

Do you want to know the best part? We successfully hosted our first webinar where we partnered with experts from different facets of the education sector, all of which were done to address the concerns of one of our most valuable stakeholders – the students.

Also Read: How getting digital transformation right can help businesses get through a pandemic

It was just the confidence boost that we needed at a time like this, and now we’re well on our way to host the second one.

Given our whirlwind of a ride, I can say with certainty that I am extremely proud of what we’ve achieved, where we’re going, and the millions of student journeys we’ll make memorable.

Once we step out of our comfort zone and push the boundaries, that’s when we will become a better version of ourselves.

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The COVID-19 outbreak has brought the world to a standstill. Almost every industry is suffering because of the crisis. Startups in the Asia Pacific market have also felt the side effects.

What’s more, some of them were the first to feel the power of COVID-19. So, let’s see how they are dealing with the current situation. 

Impact on Asian startups

Venture capital investments in Southeast Asia have been the economic driving force for many years. The startup culture was thriving across the region. Savvy investors and successful entrepreneurs formed partnerships that generated profits.  

In December 2019, the situation quickly changed, and the pandemic caught everyone off guard. 

One thing is sure, though—most startups in Asia are facing a bleak outlook. Even unicorns such as Gojek, Bukalapak, or Grab are not in the safe zone. They must also come up with effective coping strategies to survive the pandemic.

Many startups in Asia are online-based, which allows them to deploy work-from-home policies. However, a significant number of companies failed to adapt to a new way of doing business. As a result, these startups are hanging by a thread and fighting for their lives.

Also Read: How can startups factor in the unpredictability of COVID-19 in their Machine Learning models?

Economic activity in the Asia Pacific region

As soon as the epidemic emerged, Asian countries started adopting emergency measures. In most cases, the governments reacted quickly and effectively. The authorities banned all gatherings, and they also closed borders. 

Likewise, safe distancing measures have become the norm. So, how did these emergency actions affect economic activity in the region?

Well, the term that could best describe the situation is a disaster. The stocks are plummeting as we speak, and fundraising is experiencing a seven-year low.

More precisely, statistics revealed that Asian venture capital firms managed to raise US$2.2 billion in the first quarter. This amount is the lowest in the past seven years, which says a lot about the effects of COVID-19.

The industries that suffered the most were tourism, travel, and hospitality. Any investments in these industries lost their value because of the pandemic. On top of that, the mantra for capital investments seems to be “save cash.” In other words, everyone is waiting to see what will happen with COVID-19.

As a result, very little funding is available for Asian startups, which puts venture capital firms in a vulnerable position. In a way, startups must fight for their lives without asking for anyone’s help. That said, here are some of the best strategies for surviving the COVID-19 pandemic.

Overcoming the crisis

As we said, the novel coronavirus has hit the Asian financial markets like a ton of bricks. A vast number of corporations and enterprises are facing liquidity problems.

Also Read: What can we learn from successful venture capitalists?

Meanwhile, the governments have issued a series of measures to alleviate the effects of the pandemic. The reduction in tax rates was one of those strategies, as well as capital injections.

Nevertheless, the lack of “mega deals” is evident. So, how can startups survive the storm?

Well, many entrepreneurs decided to cut outsourcing contracts as soon as COVID-19 became a widespread threat.

Likewise, startups in Asia Pacific have initiated pay cuts. Admittedly, this unpopular move will not help you make new friends. Yet, cuts are sometimes necessary, and a pandemic is one such situation.

Of course, the best course of action when it comes to paying cuts is to start from the top. Management teams are the ones that need to shoulder responsibility and accept a temporary reduction.

Another essential tactic in this trying time is the exit strategy. For that reason, savvy entrepreneurs in Asia have reviewed their exit plans in recent months.

But if you do not want to abandon ship just yet, fresh funding is of paramount importance. Thus, startup owners in Asia need to work day and night to find suitable investors.

Of course, this might be easier said than done amid the turmoil. At the same time, entrepreneurs need to understand that you need the hottest fire to forge the hardest steel. For example, the rise of Alibaba began during the 2002–2004 SARS epidemic. 

Also Read: How to scale blockchain as COVID-19 hits traditional markets

What to expect ahead

Without a doubt, COVID-19 has forced Asian startups to leave their comfort zone and step into the spotlight. Entrepreneurs and investors are now in uncharted territory, which makes it hard to predict the future.

Nonetheless, some trends are already visible.

For instance, startups that are involved in the education industry could be flourishing in the years to come. The so-called edutech apps are on the rise, and the same applies to video conferencing software.

Online learning tools have proved their worth during the pandemic. As a result, this sector is already receiving massive funding.

The same goes for e-commerce platforms. During the lockdown, e-commerce stores saw an enormous rise in demand. Since online business is in their DNA, most of them adapted quickly to the new market rules.

In the future, e-commerce startups could flourish in Asia as well as the rest of the world.

Likewise, streaming services could see a spike in demand if a distancing policy stays in place for long. Thus, startups with a focus on Asian production could thrive in the years to come. Also, podcasts are an exciting market segment, and plenty of entrepreneurs are eager to jump on the bandwagon.

Also Read: How getting digital transformation right can help businesses get through a pandemic

Last but not least, we should mention the importance of healthcare in the post-pandemic world. Once we deal with COVID-19, the world will need to raise the bar when it comes to medical assistance.

So, telemedicine is a promising market for aspiring investors. Also, entrepreneurs in Asia could focus on AI-based healthcare systems. In any case, the goal is to lower the costs and provide better medical care.

Similarly, the rise of big data could provide startups with a chance to exploit vast databases and come up with a wide array of digital services.

COVID-19 is changing the way we live and the way we do business. As a result, Asian startups must find ways to overcome and adapt to this challenging situation.

Even though the devastation caused by the pandemic could reach epic proportions, the same could happen to improvements. In other words, COVID-19 could force us to make quantum leaps forward.

It remains to be seen if Asian entrepreneurs will manage to find their way around the new virus and improve their financial results. 

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Register for our next webinar: Fireside chat with Paul Meyers and Jussi Salovaara

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