Looking To Invest In A Lucrative Business? Here Are 5 Businesses That Are Thriving During COVID 19

The year 2020 has been unlike any other, mainly due to the onslaught of COVID 19. Six months have passed and experts are still trying to figure out the impact of the pandemic. While the pandemic is here to stay a little longer, the collateral damage has occurred in the form of the economic downturn of the country. And, MSMEs & startups have become the epicenter of this crisis. However, not all is lost; some businesses have been given a new lease of life in this looming crisis. The sudden change in the way we live and work has paved the way for these businesses to thrive during the pandemic. 

Here is a curated list of businesses that have emerged as the underdogs and can add value to your investment portfolio.

EdTech Platform

The edtech sector has observed a significant growth ever since the onset of the pandemic. According to a report by Omidyar Network India and RedSeer Consulting, the edtech sector in India is currently valued at $375 million and is expected to clock a 120 percent growth in 2020, exiting the year at $1.7 billion. This growth has been further assisted by the ongoing COVID situation. 

Fear of the disease spread has taken educational activities online; the number of users in both K12 & post K12 segment has doubled. Interestingly enough, the average time spent and paid subscription on these platforms have also increased. 

This steadfast penetration into online-based learning will provide abundant opportunities for the incumbent players. Moreover, skill-based learning will also observe a steady rise in times to come. Owing to this rising demand, 14 edtech start-ups have already raised funding since March 2020. The Edtech sector is posed with its own set of challenges that need to be mitigated. But despite these roadblocks, edtech holds a sweet spot in VC investment.

These education businesses are seeking investments

SAAS & Cloud Companies

The COVID 19 impact on SAAS companies has turned out to be favorably low and these companies are likely to emerge a hot pick of investors. Despite the plunging growth in the first half of 2020, the Indian SAAS market is expected to be valued over $20 billion in 2022.

The increase in digital penetration post lockdown has supported the demand for harnessing big data, advanced analytics, and machine learning. Both big and small organizations (barring a few industries that have been severely impacted by COVID 19) have transcended into the digital world and are therefore seeking secure cloud-based software services.

SAAS/Cloud companies have the unique opportunity to build a loyal customer base and capitalize on new product features that are time relevant. The trend in growth indicates the emergence of many unicorns from this sector. It will certainly make investors bullish and willing to back these companies.

Fintech & NBFCs 

Traditional banking is certainly one sector that has been deeply affected by COVID 19, but pacification comes in the form of fintech/NBFC players taking agency and disrupting the BFSI segment. 

Services provided by these companies, such as - simplified digital payment, customized solutions, and seamless virtual banking has caught the eye of many investors that are vying for great rewards. 

On the flipside, lending fintechs are being inundated by customers for reliefs and are therefore cash-starved at the moment. These fintechs will need to re-innovate to enable faster recovery. A better way to do this would be by creating strategic partnerships with banking institutions/technology backed firms and advancing financial inclusion programs. For fintech players, the light at the end of the tunnel is gathering funding from investors. Fintech is a niche space for VCs who are keen on ushering the early-stage ventures.

Here are some NBFC firms seeking investors

E-Commerce & Logistics Companies

COVID 19 is a serious crisis that the economy is currently posed with but it’s a relief knowing that some businesses have become the rainmakers in the face of this challenge. For 10 years, the e-commerce expansion in India was driving the logistics boom, the pandemic has only bolstered the evolution of delivery services in India. 

Response from traditional businesses to the pandemic is a segue into the e-commerce way of life. It’s not just the consumer-facing B2C businesses that are providing innovation-based compliance. B2B companies that are backing the e-commerce ecosystem have also enhanced their tech and supply chain systems. These specialists are poised to serve both existing and emerging consumer base with extensive pin code coverage. In the aftermath, India’s e-commerce market is expected to grow almost threefold to $85 billion by 2024... Making it a great investment opportunity that VCs can capitalize on. 

Managed Office Spaces

Much to anyone’s amazement, there will be a growing demand for co-working and managed office spaces post COVID 19. With people unlikely to travel for work, these managed office spaces would provide a suitable alternative to the need at hand. These are safer than conventional office hubs and come for a fraction of operational costs for the same. 

The future of work is already here, as many workers have been rendered jobless and are now seeking gig working opportunities. According to ASSOCHAM, the size of the gig economy is expected to grow at a CAGR of 17% and will likely hit a gross volume of $455 billion by 2023. Managed office providers will have the opportunity to tap into this niche category. 

Could this be a good investment opportunity? I feel that it’s a sure shot recipe for yielding great returns in the long-term. 

This was my list of 5 lucrative businesses that are a great investment opportunity for business investors during COVID 19. If you think I missed out on something then please write it down in the comments section below.