COVID-19 has been a catalyst for hyper-growth in some industries & created a fast decline in others. For instance, grocery delivery has rocketed while travel slowed down & prop-tech has been completely upended. With all of this happening companies are being born & opportunities arising from the changes in consumer behaviour.
The uncertainty in the lockdown & the manner inwhich it has been handled has hurt small businesses in South Africa. This has further highlighted the importance of the small business ecosystem in the country. Therefore we are going to see a lot of ad hoc calamity in this area but also the creation of tools that will enhance the ability of a small business to succeed.
These are some of the trends I have seen over the past couple of months:
— EdTech (Education Technology)
Whatsapp Chatbot learning/information
Early-Childhood development games
One of the first things to be closed during lockdown were schools. & since then, there has been a lot of uncertainty & scrambling to continue with the curriculum. But the way the South African education system is set up is a tale of true inequality. While some schools were able to pivot to online learning due to the requirement that all students have tablet devices, on the flip side this was not the case in most government schools. Nevertheless, a lot of content & learning material was shifted to a reliable communication channel; WhatsApp. There has also been another barrier that inhibits distance learning; the high cost of data. I am not sure how sustainable the online learning trend is but it has shown the ever-present gaps in South Africa’s education system. It will be interesting to see what other products can be layered on top of WhatsApp’s business API.
Primary care Booking
Primary care booking existed through Dr Connect by Discovery Health & RecoMed. Online consultations came with COVID-19 & the interesting thing here is; can computer vision progress enough for doctors to be able to examine patients through a screen.
— SME Funding
Merchant Cash Advance
New underwriting models
The SME funding gap is ever-so present. In the USA FinTechs were tasked with dispersing PPP grants while in South Africa the government & banks have struggled to disperse the loan-grants. SMEs that were still able to trade needed to find alternative sources of capital & FinTechs needed alternative data to underwrite SMEs. Yes, this might not be new but there are new elements around it. For instance, KYC (Know Your Customer) documents are important at first contact but the relationship is an ongoing ordeal so isn’t it more important to know the transaction history of the business or the ability to tap into their accounting platform to underwrite their invoice history?
As long as SMEs exist they with need funders to back them.
This has been the clearest cut trend for me. No less than 6 startups in the last 18 months have been started to give employees an advance on their earned salary. I even wrote about it on my substack newsletter.
E-commerce is connected by the hip to payments & logistics. The more people are comfortable with purchasing things online, the more e-commerce stores are created the more important it becomes to have fast fulfilment of products, which makes the purchasing experience worthwhile.