The novel COVID-19 pandemic is expected to create an economic recession globally, as more countries record new cases of the virus. According to the World Trade Organisation, global tradings are expected to hit a low of between 13 - 32 per cent, depending on how hard the implications of the virus will be to individual companies.
We had a conversation with Rob Beyer, co-founder and executive chairman of Villgro Kenya on how this current crisis will impact the different innovators and how they can hope to deal with it’s effects without running out of business.
What are some of the areas we expect companies to be affected/ disrupted? – we have already seen the working from home policy, supply chain distributions have also been affected, what else?
Rob: Many of the organizations, businesses or government offices that our portfolio companies would normally be engaging are now closed. This leaves revenue generation a definite challenge for large numbers of companies.
How can the incubatee companies manage those disruptions individually (on their own without outside support)
Rob: For some companies, this can be very hard. Those that engage more with the private sector have seen business opportunities close off and are now entering a “hibernation” phase, trusting that their available cash flow reserves can outlast the COVID-19 situation.
On the other hand, several of our companies are leveraging the situation to increase their exposure and services. Point of care diagnostics (specifically around correctly diagnosing COVID-19), emergency response and local manufacturing of PPE and medical supplies are a few examples.
What ways can incubators/accelerators help their portfolio companies to manage these disruptions – for example a change of strategy such as encouraging developing innovations that are Covid - centric.
Rob: As Villgro Kenya specifically focuses on healthcare companies, this COVID-19 situation provides an opportunity to expand the portfolio and look for those companies/innovators who can make a tangible impact on improving the situation in the country. We have reached out to our network of impact investors and funders who are now seriously evaluating their ability to increase access to capital which we will leverage to the portfolio.
This is not the time for incubators or accelerators to hibernate, this is the time to take a leadership role and bring hope to entrepreneurs that funding is available and they can be part of the solution.
The most important thing right now is to have Incubators and accelerators offer their portfolio companies resources and guidance while encouraging them to re-evaluate their operations to help reduce costs and increase runway