Project Survival: Digital Darwinism in the Time of COVID-19

Nicko Widjaja is the CEO of BRI Ventures, a US$250 million+ corporate venture capital arm of Bank BRI, the top microfinance institution in the world, the largest bank in Indonesia and its first digital bank.

The Chicxulub asteroid wiped out all non-avian dinosaurs and ended the Cretaceous period some 66 million years ago. Those that survived only did so by adapting to Earth’s new conditions. For Southeast Asia’s tech startups and investors, COVID-19 is that asteroid.

In China, the value of venture capital (VC) deals plummeted by two-thirds at the beginning of 2020, down from the same period of 2019, according to Preqin data. Now almost two months into the lockdown, startups are slashing jobs, cutting salaries, and hoping for government intervention to maintain liquidity.

Let’s look at VC deals out of Southeast Asia, a collective market which has been selling its large middle-income population as ripe with greenfield opportunities for years. Well, in 2019, tech investments had already fallen 36% to $7.7 billion, down from $12 billion in 2018. Take two-thirds from $7.7 billion, and that would theoretically leave Southeast Asia’s startup ecosystem a scant $2.57 billion to divvy up this year at best.

Startups in the region that have raised funding (some even reaching unicorn status) by disrupting consumer sectors like travel, transport, retail, food delivery, and events, are now facing massive and sudden disruption from COVID-19.

Darwin posits that it is not the strongest and most intellectual that will survive, but the most adaptable. But unlike natural selection, which sees species evolve over generations, tech startups don’t have the luxury of time. They must adapt right now to the new realities that COVID-19 has brought to their physical, social, and political environments.

The first few weeks of social distancing, and now lockdowns in cities around the globe, have already given clues as to who might weather this storm.

The quiet ones awaken