Across the globe, the month of May saw a wide assortment of encouraging and discouraging COVID-19-related headlines emerge from communities, organizations and governments. China permitted over one million people to venture to its parks, including Disneyland in Shanghai, while European countries too eased lockdowns. In the US, the seeming hopefulness of relaxed restrictions in much of the country was dampened as the country surpassed the 100,000 deaths milestone.
Meanwhile, the World Health Organization (WHO) reported that the Americas have now emerged as the new epicenter of the pandemic.
The technology sector also witnessed its own mix of disappointing and promising COVID-19 developments in May. While investment in technology startups took a nosedive, other startups and startup organizations turned their sights to creating companies that combat the virus. Elsewhere, big players like Apple and Google released new technology to trace COVID-19 cases, marking what one Swiss epidemiologist called a “watershed moment for the development and adoption of proximity-tracing apps.”
Surveying this latter array of news items, here is a closer look at some of the most notable stories emerging from the technology and startup spaces in May amid the COVID-19 outbreak.
As the initial economic shock of the novel coronavirus pandemic swept across the globe in March and April, many governments scrambled to create relief funds for struggling startups and medium-sized businesses.
On May 20, the UK Treasury announced applications were open for the Future Fund, a public-private fund that UK-based startups struggling through the pandemic can access for convertible loans between £125,000 and £5 million. Within one day the government received over £450 million worth of applications — nearly doubling what the British government had initially committed to the fund, according to Sky News. The nature of the loans, in which debt is converted to equity if not repaid, could lead the way for the British government to hold equity in “scores of startups,” wrote Sky’s Mark Kleinman.
As more countries began to reopen business and travel across Europe and North America, they are doing so with varying capabilities to trace people who’ve come into contact with the virus. Contact tracing, the process of identifying, assessing, and managing people who have been exposed to a disease to prevent onward transmission, has been labeled an “essential public health tool” by the World Health Organization (WHO), and many governments are racing to develop safe and accurate technology.
Advancing one step toward this goal, the European Commission published guidelines for interoperability for contact tracing apps, focusing on their voluntary use as well as the ability to be interoperable across borders. Additionally, the guidelines suggest that all contact tracing apps be temporary, secure, approved by national health authorities, and use technology that functions with all major device operating systems, among other suggestions.
On the Isle of Wight, the contact tracing app currently being tested there by the UK government experienced a bit of a setback. Prime Minister Boris Johnson announced that the app, which was expected to be rolled out nationwide in mid-May, would now not be available until June. The app had received criticism from cyber security experts who pointed to several security and privacy weaknesses in the source code. The UK’s National Health System (NHS) teamed up with researchers from Oxford University and developers from VMWare to build the app.
In the United States, Democrats in the House and Senate introduced the Public Health Emergency Privacy Act that aims to better ensure privacy and data security rights for personal health information shared with tech companies and the government for use in developing and deploying contact tracing apps. The proposed act comes as more technology giants offer up track and trace solutions to governments around the globe.
The big players
Two of the largest companies developing track and trace technology are Apple and Google, who teamed up to release their “Exposure Notification API” for tracking COVID-19 cases, according to a report by Thomas Macaulay on TNW.
The tech giants touted their strong emphasis on user privacy when creating the technology, saying in a statement that “user adoption is key to success and we believe that these strong privacy protections are also the best way to encourage use of these apps.” Unlike other technologies being used by governments, the developers say the API doesn’t track location data and the entire system is opt-in. The companies claimed to have been approached by 22 governments interested in the technology, and Switzerland reportedly became the first country to launch a tracking app based on the API at the end of the month.
The new API was also rolled out in Apple’s latest version of its iPad and iPhone operating system. Alongside that update was included a feature expediting the FaceID process by prompting users to put in a PIN when Apple’s facial recognition system can’t recognize a user due to their face mask.
Other large tech firms that made COVID-19-related announcements in May include Microsoft, who together with United Healthcare launched ProtectWell, a free symptom-screening app for the workplace; Samsung, who teamed up with Facebook to train its offline retailers under lockdown in India to go digital on platforms like Facebook, Instagram and WhatsApp; and Russian cybersecurity giant Kaspersky Labs, whose founder announced the launch of an online accelerator dedicated to reviving the tourism industry, hit hard by coronavirus-related travel restrictions.
Mark Zuckerberg also recently revealed that Facebook would be moving a percentage of its existing workforce remote and is preparing to hire remote at scale, and will do so especially in regions outside of expensive tech hubs. Tech giants have embraced remote hiring, with the trend predicted to catch on among all companies in the short term.
The virus’ economic impact continued to rear its ugly head in earnings reports in May. Foxconn, one of the world’s largest technology manufacturers and the largest supplier of materials for Apple, announced a 90% drop in profits for this quarter. Shortly after the announcement, Bloomberg opinion columnist Tim Culpan wrote that this development (along with Apple’s silence on projections for the upcoming quarter) could mean a bleak outlook for iPhone revenue next quarter.
Venture capital and startup accelerators
The economic shockwave felt by some big tech firms reverberated throughout the startup world as well. Global startup funding has dropped 20% since December 2019 amid the COVID-19 outbreak, according to a report released in May by industry consultancy Startup Genome.
Regionally, the UK witnessed an 83% decrease in funding for seed stage startups from late March to mid-May. A survey from Activate Our Angels, a consortium of entrepreneurs and investors, reported that 65% of UK Angels continued to invest during lockdown, though COVID-19 has reduced their total available capital in 2020 by 61%.
In the US, the venture capital space — which wasn’t hit terribly hard in February and March — took a “nosedive” in April, according to GeekWire’s analysis of Pitchbook data. The report shows VC investment dropped 46% from March to April, and investment was down 43% compared to the same time period last year. In a recent webinar series from the University of Southern California’s business school, investment banker Lloyd Greif compared the current deal space amid the pandemic to the freeze after the September 11th attacks.
European venture capital is also bracing for a hit after a record showing in Q1, reported TNW’s Yessi Bello Perez. She wrote that Pitchbook’s European Venture Report Q1 2020 predicted dealmaking to “slow considerably” in quarters two and three.
Despite the overall slump in the funding caused by COVID-19, there were still notable investment rounds announced in May.
Houston, Texas-based Liongard, a software startup for managed service providers (MSPs), announced that it raised a $17 million Series B round of funding led by Updata Partners. And Andreesen Horowitz took part in the $14 million series A round for Deel, a payroll system for remote workers. The VC firm also participated in the $10.8 million Series A for online digital events startup Run The World, along with Hollywood actor Will Smith and comedian Kevin Hart. The company had reported a surge in interest after many large-scale conferences moved online for the first time due to the coronavirus.
Among the most notable organizations already announcing all-digital events in 2020, the Horasis India Meeting – a summit of hundreds of government ministers, executives and entrepreneurs – recently revealed plans to move its conference online. The AI For Good Global Summit –a United Nations initiative on artificial intelligence organized by the International Telecommunication Union (ITU) and the XPRIZE Foundation – did the same. The organizers recently announced a series of free webinars and digital workshops throughout the rest of the year that will replace the physical conference.
While funding took a hit in May, tech accelerators from all corners of the globe pivoted their pursuits to help tackle the COVID-19 crisis.
Forbes8, a digital video network focused on entrepreneurship in Nigeria and backed by business magazine Forbes, announced the launch of what it calls the country’s “First Digital Startup Accelerator” to support the country’s startup sector during the pandemic. Launched in partnership with the Global Startup Ecosystem, the program is entirely free and has no equity obligation for the startups.
Over 7,000 kilometers away on the subcontinent of India, Risers Accelerator, which is associated with the Indraprastha Institute of Technology, Delhi (IIIT-D), a university in New Delhi, announced funding opportunities specifically for startups fighting COVID-19, according to The Times of India.
And in Canada’s capital Ottawa, the Accelerator Centre announced a new cohort for startups fighting COVID-19 in which they’ll receive CAD $30,000 in seed funding and $10,000 in business support, according to BetaKit. MassChallenge Israel, a local chapter of the global startup accelerator network led by Yonit Serkin, also introduced its new 2020 cohort of over 40 tech companies from across the globe.
In an effort to help airports innovate passenger and cargo screening during and after the COVID-19 outbreak, Washington D.C.-based government technology accelerator Dcode partnered with travel security consultancy Pangiam to launch the Trade & Travel accelerator program. Also in D.C., United Global Alliance, an organization that helps build, scale and fund companies that aim to solve some of Africa’s toughest sustainability challenges, announced the launch of Pandemic Response through Innovation and Scientific Methodology (PRISM), a multi-sector initiative to address urgent needs of vulnerable communities in the US and Africa.
Startups battling COVID-19
It wasn’t only technology accelerators combatting COVID-19 in May. Startups stepped up to the challenge too.
In Japan, biotech upstart Bonac Corp. announced it was developing an inhalable treatment for COVID-19 patients in partnership with the local government in the Fukuoka Prefecture. The timeline though is quite far out, with the company saying it could be ready for clinical trials in 2022.
Another biotech startup, Richmond, Virginia’s Phlow Corp., was recently awarded a $354 million contract from the US federal government to create the nation’s first “strategic active pharmaceutical ingredient reserve,” which will make large amounts of chemicals for medicines used to treat patients with COVID-19. Meanwhile, New York City-based health tech startup Aetion, which was founded by faculty from Harvard Medical School, inked a deal with the US Food and Drug Administration (FDA) to analyze real-world data about current use of diagnostics and medications in the pandemic.
In the realm of contact tracing, Google and Apple weren’t the only companies making headlines in May. Many startups also released apps to help health officials track the spread of the virus. For instance, New York-based VIRI launched an app built on a decentralized platform that it says offers complete anonymity. The startup says the app complies with all governmental criteria for COVID-19 tracking. Chicago-based Proxfinity repurposed its own smart networking badge for conference-goers into a COVID-19 tracker for large employers.
A noteworthy bunch of startups also introduced solutions to help businesses cope with other stresses accompanying the virus. To assist enterprises with gaining a head start in the remote revolution, startup Joonko released it’s platform to make recommendations on which roles should transition into remote positions, while Talview is helping universities go remote with a virtual tool to facilitate testing and onboarding of students.
With the technology sector heading into the fourth month of the novel coronavirus pandemic, industry news in May was once more a veritable rollercoaster of headlines. In any case, the overall commitment of so many actors in innovating on ways to address the difficulties of the virus was an encouraging takeaway.