Investing and money matter particularly during the pandemic
Investing your money during COVID-19 is a bit of a gamble. As the pandemics rages on, individuals and businesses have had to adjust their operations to not only adapt but thrive. Lockdowns and travel restrictions have been forcing businesses especially to alter virtually every aspect of their operations. From office work, hiring, communication, management everything has gone remote.
And now so has investing. The initial reaction after COVID was a sudden halt on all the investment deals that were to go through in the year. Stock markets especially felt the pinch. Large stock markets like NYSE and the DOW JONES all recorded one of the largest falls since the economic depression of 08. No one was willing to bet big in an economy that seemed apocalyptic.
However, as time went by people adapted to “the new normal”. Managers started to figure out new ways to get their businesses running again, albeit remotely. Even large conglomerates like Twitter completely embraced remote operations as most of their employees were allowed to operate from home.
Investment also followed suit. As the global economy finds its feet again, investors are also feeling bullish and are showing that with their dollars. They are investing just as much as pre-COVID, only this time they are doing it all online.
2021 is awash with stories of VCs doing all their funding over Zoom calls. Only last month, there was a lot of excitement over the new unicorns in India. The second most populous country in the world has been the centre of attention as far as startups and funding are concerned. It has already churned up 10 unicorns as per April and that number is projected to reach 100 at the end of this year. This has been primarily due to increased investments by conglomerates such as Steadview, Prosus Ventures, Falcon Edge Capital, and even Google.
The biggest player has however undoubtedly been Tiger Global. The New York investment firm has already closed a funding round of a staggering $6.7 billion and is an investor in 20 of 47 of India’s unicorns.
What is more striking however is the speed at which those investments are made. Tiger is rumored to be making 4 deals per week as per Pitchbook. It is said that Tiger even approaches founders even before they show any intention to raise money. Morningbrew.com says that in some instances it has gone from conversation to term sheet in three days!
So how do they it so fast?
In the Indian case, it is said that Tiger has an India dedicated team who can complete diligence in just two weeks. The rest is just a Zoom meeting with director Scott Shleifer to finalize the deal.
It seems Zoom is the app of choice for VCs.
Other VCs are taking this system to the next level by combining remote investing with big data. Founded by the former co-founder of Atomico Mattias Ljungman, Moonfire is a venture capital firm that is trying to imbue data into remote investing.
Moonfire was formed in 2020 in the midst of the virus and had to do all of its investing remotely. Much like Tiger Global they’ve had to rely on a network of online workers to do due diligence when finalizing deals.
They are however said to be combining this with the best of machine learning, big data and artificial intelligence to make better investments. Moonfire will focus on a broad range of areas such as gaming, work and knowledge, health and finance.
To date Moonfire has already invested in startups like Pento, Business Score, LoveShark, Homerun, Oliva, Humaans and many more. With a $60 million fund Moonfire along with giants Tiger Global are proving that it is possible to be optimistic during the pandemic.