If you started the year hoping to buy a fledgling business, chances are these plans have been derailed or delayed by the COVID-19 pandemic.
However, while the virus has completely changed the marketplace for businesses and consumers worldwide, it is by no means the case that there aren’t good acquisition opportunities out there.
In fact, with consumer tastes and dominant trends likely to be drastically altered by the pandemic and lockdown, there are a whole host of sectors that are perfectly placed to respond to customer needs and thrive in the post-coronavirus economy.
So, as the UK looks to return to normal and you perhaps start thinking once again about buying a startup, what are the kind of sectors that you might consider? Here are four which we think could represent a very worthwhile investment indeed.
A fairly obvious one right off the bat. A key feature of pretty much everyone’s lockdown experience so far will be getting a knock at the door and collecting a delivery – at an appropriate distance, of course!
Whether it’s shopping, takeaways, or even fresh laundry, chances are you’ve been getting more things delivered than usual during this time. It stands to reason, then, that companies offering a delivery service of some kind represent a sound investment at this time.
While the delivery market may be dominated by big players like, for example, Deliveroo, that’s not to say that there aren’t disruptive startups popping up everyday and taking a piece of the market. Just a quick scroll through an app store will bring up a nearly inexhaustible list of small companies offering any delivery service you can imagine.
Going forward, the marketplace is likely to remain favourable to delivery companies. With social distancing here to stay for the time being, far fewer people are going to be going to places such as restaurants, supermarkets and pubs. This creates a window for those delivering food and other goods and services.
As with delivery, more people at home means more people buying online. E-commerce has been a growing sector for years, as footfall across high streets and shopping malls has continued to fall. This is something that is likely to be accelerated by coronavirus, even when shops have reopened.
For everyone queuing for hours outside Primark on the day that non-essential stores reopened, there are likely to be just as many people who are increasingly wary of and hesitant about returning to shops.
While there will eventually undoubtedly be something of a resurgence in customers shopping at brick and mortar locations when normality returns, COVID-19 could signal a broader, more permanent shift towards online retail. After an initial resurgence, it’s not inconceivable that people will be more wary of going out to shop, while others may simply continue with the habit of online shopping they’ve formed during lockdown.
For all of these reasons, e-commerce startups are likely to be an extremely sound investment, both for now and for the next few years. The online marketplace offers you no end of incredible acquisition opportunities, from online boutique fashion to delivery-only bakeries.
With gyms closed during lockdown, many exercise-minded people have had to adjust to keeping fit in a different way. At the same time, lockdown has been, for many, an opportunity to try and lead the active, healthy lifestyle they’d always intended to.
So, whether yoga, running or cycling, hundreds have turned to exercise-based apps to help them keep fit. To take just one representative example, between March and the end of June, over 858,000 people downloaded the NHS-backed running app Couch to 5K. That’s a 92 per cent increase on the same period in 2019, when 448,000 people downloaded it.
Beyond exercise, friends have also turned to social apps offering things such as group video calls, games, book clubs etc. in order to socialise during lockdown. For example, in March, as lockdowns kicked in across the world, the Houseparty video chat app became the most downloaded app in the UK.
As with e-commerce and delivery, this sector is absolutely ripe for disruption by innovative startups and there are guaranteed to be countless bright ideas out there to invest in. While it’s doubtful such apps will see the same levels of popularity post-COVID-19, they could remain prominent for as long as some form of social distancing is in place. Beyond that, meanwhile, it’s likely that many users will continue to use these apps, particularly those wanting to continue their active lifestyle.
Remote work solutions
Working from home has become the norm for many over the past few months, but, as we outlined a few weeks ago
, “WFH” has been a rapidly growing sector for years. Coronavirus has likely accelerated this trend, meaning that remote working solutions are set to be a sound investment for years to come.
This is a wide-ranging, diverse and cutting-edge sector offering a range of investments. After all, when working from home, employees need to have all the areas covered that an office ordinarily provides. That ranges from security, connectivity and the ability to collaborate and communicate with colleagues.
Companies in sectors such as telecoms, cybersecurity and cloud computing will be competing to take advantage of this ever-growing marketplace, which is bound to create significant opportunities over coming years to invest in cutting-edge startups.
The post-coronavirus world may seem distant, but it is already starting to take shape and we can already begin to predict how life might be altered afterwards. Despite the hardships and disruption, this transformative crisis is bound to create a huge range of opportunities to acquire emerging and innovate companies.