Lockdown in Ticino: can startups survive the pandemic?

At the Swiss-Italian carpooling startup Bepooler, CEO Mirko Baruffini is concerned mostly by the loss of revenues: “most of our users are not travelling or commuting, therefore a number of companies are not paying for the service we provide. The government support we’ve obtained through the zero-interest overdraft checking account helps us to cover only our operational costs, i.e. rent, utilities and salaries”. But for a startup company offering a digital service platform, the real concerns are for future prospects: “Potential investors are putting on hold their interest in our business because our KPIs, which are down because of our inactive users, and if we cannot invest in our platform, we are likely to incur in trouble ahead”, Baruffini points out. “Nevertheless, we see opportunities in the post-Covid phase. We hope that people will rethink their travel habits and work methods, like perhaps less commuting on a crowded train or bus and more home-office work, which would open the door to consider ‘micro carpooling’ (two people-one car) as an alternative”, Baruffini says.

Looking forward in the event industry
“We are helping our customers who have been forced to postpone or cancel their events. Entertainers are suffering important levels of income loss”, says Marco Alberti, CEO and co-founder of Stagend, the startup founded in 2010 and incubated at the USI CP Start-up in Lugano, which operates in the entertainment business, offering an online platform to book performers for events, gigs, and especially wedding parties. “To keep our liquidity flowing, we have requested and obtained help from the government, thanks to our status of incorporated firm, but this crisis comes in a phase of steady and very promising growth, with operations expanding mainly in Germany, which took much time to achieve”, Marco adds. Today, Stagend is located at the Tecnopolo Ticino, in Manno, and counts seven FTE staff. “We’re overall optimistic, also because of the Innosuisse project we’re involved in that started in 2019 together with the Swiss AI Lab (IDSIA), which is helping us develop an innovative real-time matching and pricing system that should enable us to stay on track with our growth plans. We want to be ready to manage the boom of events we expect after the pandemic, because we all want to celebrate!”, concludes Marco.

Working full speed to create new opportunities
In the realm of early stage startups, which are seemingly the most at risk, we find Ticinsect, the Lugano-based company that produces animal feed ingredients by turning food waste into valuable proteins, which is currently incubated at the USI CP Start-up. According to CEO and founder Elisa Filippi, “the Covid-19 pandemic is making me work twice as much as before. The business opportunities and negotiations that we had until now have clearly slowed down, and to keep them going and to create new opportunities I have to keep operating at full speed”. Elisa runs a small lab where she can run feasibility tests for potential clients wanting to test the system. “It is essential to keep my lab fully operational in order to start new tests, one of which is currently underway and the prospects seem pretty good”, says Elisa, adding that “alongside the lab we are launching a crowdfunding campaign [through the wemakeit platform] in the attempt to compensate the difficulty in continuing the negotiations with investors, which due to the crisis have been put on stand-by – like the financing round we were working on. Finally, to cover our small salaries, we have applied to obtain income compensation, which should help a little to stay afloat during this phase”, concludes Elisa.

“Stand-by phase” hindering development of start-up projects
The startup incubators active in Ticino seem to be coping reasonably well with the situation: “all things considered we manage to operate, in remote mode we can still have one-to-one interactions and work on our projects”, says Umberto Bondi, Startup Analyst & Coaching Manager at the CP Start-up of USI. “There are, however, certain difficulties stemming from the overall uncertainty of the situation, which reflects on certain processes. For example, in the field of patenting and certification procedures: we are seeing that deadlines are not being extended, which is currently an issue for one of our early-stage startups. Furthermore, the ‘stand-by’ phase caused by the pandemic is leading investors, in turn, to halt all further negotiations until the crisis clears up. This means missing out on important milestones and hindering the overall development path of such projects”, Bondi points out.

Initiative for start-up support from the Canton
Up until now support measures for affected companies were targeted at SME and not at start-ups or startup-projects. For example government-backed loans are only granted for up to 10% of the revenue of 2019. Startups, in fact, often do not have a company structure (incorporation) nor cash flows, as they are not yet productive and typically live off funding from private or public entities, the latter granted indirectly through coaching or covering R&D costs sustained by academic research institutions or (poly)technic schools. At Fondazione Agire, the Innovation Agency in Ticino, an initiative has been brought forward – together with the TiVenture and other partners – aiming at obtaining specific support measures from the cantonal government to help startups in this delicate phase. (For details: www.agire.ch)