Uncertainty of COVID-19 and lockdown has hit local startups hard

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The state of the world makes reaching for your smartphone in the morning to check the news you missed while sleeping something of an extreme sport.

The situation changes daily and looking to the future is tough when you’re not sure what the next 24 hours might hold.

For businesses, especially startups, this uncertainty can spell disaster.

AlphaCode, the incubator best known for assisting what have become some of the country’s biggest fintech startups has asked its members about their experiences during lockdown.

As you might imagine, it’s a mixed bag of experiences.

“Mixed experiences are expected for our members but those with a digital first approach are benefiting the most. Those experiencing difficulties, are evaluating product offerings to better address the new normal, but the uncertainty of the Covid environment adds complexity to pivoting,” head of ecosystem development at AlphaCode, Andile Maseko said in a statement.

While startups in the travel, tourism, food and beverage sectors have been hit hard, fintech startups which offer financial services have also been struggling as the demand for loans and payment holidays grow.

“Our clients, informal traders in township environments, have been deeply constrained in trading point and then, where they can trade, from decreased demand,” explains founder of Spoon Money, Nicky Swartz. “This has a direct knock-on our revenues and planned growth. Like every other business, we have re-forecast the rest of the year looking at the worst-case scenarios.”

While demand might be high for loans, Fincheck chief executive officer, Michael Bowren says that the risk appetite of banks and insurers has dropped.

Some good news

But there is another side to this coin and some fintech startups are flourishing. As Maseko mentioned, digital first offerings are rather popular but so are solutions that cover investment and perhaps more importantly, education.

“Because finances are such a significant source of anxiety for staff, we have seen that online learning through our platform has increased significantly. Employees are using this time to take control of their finances. In fact, we have seen the highest course completion rates during lockdown. We also created a new course around Covid-19 – a financial shock course via webinars and an online short course for employees developed for in a household that’s had a financial shock,” explains co-founder of Worth, Hayley Parry.

Worth offers financial education services to companies for staff so that they are able to manage their finances better.

Oyi, the medical savings card firm, has also seen a 150 percent increase in customers and even Luno has seen a 50 percent rise in the number of active users month-to-month.


Pivoting your business can be an unwelcome exercise but COVID-19 has presented some opportunities for businesses.

For example, contactless payments have suddenly become very popular. Online shopping and ordering of food is fast becoming normal but there are so many other opportunities being taken up.

“We’re seeing our merchants go from physical to online retail. We’re working with restaurants, coffee roasters, personal trainers, gyms, dieticians among many others. People are now creating videos, lessons, food plans and sharing via email, WhatsApp, their websites and we help them to get paid digitally,” says Peach Payments chief executive officer, Rahul Jain.

As you might expect then, startups which address these needs are doing well during this time.

It’s important then to assess what your company is able to offer during this time. We’ve saw many businesses taking up new endeavours during lockdown and many of them have stuck around.

Rather than panic, business leaders should be looking at where they can pivot the business or take advantage of new income streams.

COVID-19 is disruptive and right now businesses should be seeing how they can keep jobs alive by leveraging that disruption.

[Image – CC 0 Pixabay]

Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.