For some financially stronger startups the pandemic is an opportunity to scoop up weaker rivals
is hard under any circumstances. But doing it over a video call is brutal. “It’s not the best environment for this, with people at home and kids in the background,” observes Marwan Forzley, the boss of Veem, a startup based in San Francisco which allows firms to transfer money cheaply. He recently had to let go 30 of its employees.
Californian tech firms and their financiers were among the first in America to take the threat of coronavirus seriously. Some venture capitalists began refusing to shake hands at the beginning of February . The moneymen also moved quickly to “triage” companies in their portfolio, classifying them according to how likely they were to survive and what they should do. Mostly this involved letting people go.
Much of the venture capital flowing in recent weeks has been aimed at deeply technical targets, such as Confluent, which manages corporate data. The firm raised $250m in April. Startups in telemedicine and online education are also doing well. And business is improving for some firms that had looked less resilient to the virus, such as Veem and Thumbtack. Firms want to move money cheaply and people stuck at home are planning to give their nests a makeover, driving demand for local services.
Startups have been moving away or have become “fully distributed”, with only their most important employees living in San Francisco and the rest spread across the world. Such dispersion is likely to speed up if a consequence of covid-19 is that working remotely becomes the norm. It looks likely. Big Silicon Valley companies, including Facebook and Google, are letting employees work from home until the end of the year. Twitter says they can do so indefinitely.
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