The capital of the United Kingdom, London is known to be among the leaders for establishing a favorable environment for startups in the world. In 2019, it is tied for
second place with New York as investments, capital, and access to global talent becomes more accessible in London. Given this recent growth, we can now review how an outstanding city faces a global crisis of which no country is in control.
Active cases and death rates continue to rise in London due to the 2019 Coronavirus, and the fear that these might increase faster than figures showing that we are back in control, could impact the economy both locally and globally.
Technology plays a crucial role today as it is the primary connection between our family, friends, and the world outside the window of the home office. The previous 12 months have shown that UK Tech companies have had a decade of consistent growth of building unicorns and specifically produced more Unicorn startups than other European countries
So what are the key issues startups face during the pandemic?
Although London startup sectors in fintech and technology have shown good standing amidst the pandemic, it is still not the reality for all startups. In an article by CNBC, a £330 billion loan scheme was launched by the UK government for businesses that were hit hard by the COVID-19 outbreak however, many start-ups in the country say they can’t access this funding because they have to prove that they are viable business even if the pandemic didn’t happen. Access to funding is a huge support for startups to bounce back in this crisis as ability to raise funds can depend on which sector they operate in and if they continue to operate at all.
In addition to that, changing valuations in the marketplace is also expected. Due to the crisis, attracting investors and funding becomes more difficult to pursue. Financial literacy for startups plays a crucial role on whether they will survive this pandemic or not. In this crisis, the skills and knowledge of professional management accountants can be a great help.
The Coronavirus pandemic continues to test the limits and capabilities of startups. We can say that entrepreneurs should think of a new perspective to adapt to the problem but it will be hard. As the term ‘new normal’ is coined, startups are forced to formulate a plan B to survive this year’s greatest challenge.