EXCLUSIVE: Coronavirus crisis will give birth to unimaginable ideas and next-gen leaders, says a top Indian VC Vani Kola

  • Vani Kola, CEO and founder of Kalaari Capital, believes that the times of crisis will also bring with it a new set of opportunities.
  • As we move ahead, the way businesses used to function will change. The same rules won’t apply anymore, cautions Kola.
  • Kola has now got investment requests from ‘everybody’. But she lists down the pointers which will help you take home the cheque from her.
As the Coronavirus pandemic spreads, there is fear everywhere. Businesses have to now prepare for an unprecedented crisis, receding cash flows and much more. At the core of these issues is India’s burgeoning startup ecosystem.

Vani Kola, Managing director of Kalaari Capital, believes that the times of crisis will also bring with it a new set of opportunities.

New ideas will be born out of the crisis

She believes that whether it’s the lending sector or edtech, large demand will bring opportunities. As an entrepreneur and investor, Kola who is witnessing the fourth crisis of her lifetime, says there’s ingenuity here.
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“During every crisis, entrepreneurs connect the dots in a way that you and I don’t see. Newer solutions will be created that we are not even foreseeing today. In every industry, there’s going to be a different way we think about that sector. Vernacular content creators too might come out with new solutions. Next-gen companies and leaders will emerge out of this crisis,” she said.

Today’s businesses might not see the light of the day

All of this will come true only if we come out of this crisis alive. Kola believes that once the lockdown is over, many businesses might not see the light of the day. Most of the sectors except for food, e-commerce and edtech have been severely affected. Many of them are seeing zero revenue right now. Even if they have revenue they have no supply chain or the ability to deliver.
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And this might affect jobs too in the near future.

“This is a kind of planning no one has ever thought of or prepared for. So it’s just a question of runway and cash flow and ability to keep their lights on and pay their employees. Many countries are caught in this vulnerable situation. Though their underlined business premise may still be true, it may take capacity to stay in the market for 6-9 months with severely reduced revenues and not every startup has that kind of a cash cushion to be able to ride the market,” she said.

So, what will investors bet their money on?
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Startups are turning to their investors. Kola herself has got requests from ‘everybody’, she says. In her 80-hour work week, she’s now talking to entrepreneurs and asking them the main question – What can I do for you?

While many seek investments, only a few will get cheques.

“There is no endless funding available right now and what that automatically means is that companies that have solid unit economics and a management team that can inspire confidence, are very agile, have the capacity to work through chaos will be able to get funds,” she said.
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The same rules don’t apply anymore

With the Covid-19 pandemic, businesses will pivot – emerging as a need of the hour solution. As we move ahead, the way businesses used to function will change. The same rules won’t apply anymore, cautions Kola. Earlier, she used to tell her portfolio companies to have a 12-month cash flow all the time. But companies may now see that as just a ‘six month buffer’.

“We will now have a far more digital literate population and social behaviour is going to evolve as well – it’s going to be a pattern that will set in. This forced work from home brings opportunities for companies working on employee productivity and requirements. The question lies in how we serve this larger consumer base that is now engaged digitally. Be it gaming, entertainment education, or commerce (retail) – all of this we will see a different uptake of habits than what we had just a few weeks ago,” she said.
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India’s $22.6 billion Coronavirus financial action plan pales in comparison to the rest of world
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