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How Is Coronavirus Affecting Investment In Start-ups?

The present coronavirus outbreak has not yet shown major signs of slowing down in context to new infections. The regular number of new cases are going up, after increasing for several days, and the infection rate has not yet, highly peaked, according to govt based information from Chinese authorities.

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The financial investment for several private and start-up establishments in entire Asia is likely to be slow due to the outbreak of the deadly and threatening coronavirus, but could see a bounce back afterward, this was per the reports by CB Insights, which puts emphasis on how the epidemics such as SARS in 2003 and  in 2016 affected global markets in their respective regions.

It might also accumulate to an already cooling investment capital horizon in China in the middle of slacking of the economy and also the US-China trade war. In the year2019, the amount of investment through funding raised by specifically the Chinese start-ups gone down by 44% from the year prior to a total value of nearly US$ 54 billion, as per the reports by investment database CV Source.

The coronavirus, which was originated in China in December has so far killed 2,000 people and it also infected more than 75,000 people besides over 1000 outside the Chinese mainland lives worldwide as of now. The World Health Organization (WHO) declared it a global health emergency over this grave situation.

In the years of 2003 and 2004, investment of finance for several Asian private and start-up companies had fallen by about 27% to 29%, respectively, as compared to the level in the year 2002.

However, both deal of business volume and financial investments began to recover in the 3rd quarter of the year 2004 soon after the WHO (World Health Organization) announced China completely free of new cases in May in the same year.

While during the year of 2005, the financial investment for several Asian start-ups reached a record high during the 3rd quarter, assisted by Yahoo’s US$ 1 billion investment in Chinese giant Alibaba, then a private organization and now the biggest e-commerce company established in China and holder of the South China Morning Post.

Once, the outbreak of the deadly coronavirus outbreak is getting to its end, you could all get to witness the several landmarks or pathbreaking deals and new highs in financial investments in the Asian market, and that includes India as well.

In mainland China, casualties or fatalities have already claimed several lives and, that has already overtaken the number of people killed when there was an outbreak of SARS during the year of 2003.

The World Health Organization had declared the Zika virus, that occurred during the year 2016 which majorly impacted the countries based on the continent of South America, a global emergency in February and local level funding in the 1st quarter dropped to only 25% of the level the year prior to that. The complete year witnessed funding volume in South America collapsed by nearly 50%.

Following the completion of the warning issued by the World Health Organization during the November 2016, making of business deals regained an upwardly momentum. The 2nd quarter of 2017 saw a new high for business and start-ups deals in South America, with a total of around US$ 2.9 billion invested in close to 250 deals.

The present coronavirus outbreak has not yet shown major signs of slowing down in context to new infections. The regular number of new cases are going up, after increasing for several days, and the infection rate has not yet, highly peaked, according to govt based information from Chinese authorities.

Thus, it is too early to predict or say anything whether coronavirus will have a major impact of any sort of economic or financial investments related to the ongoing ventures that are directly or indirectly linked with several established and upcoming start-ups both in China and other Asian countries overall.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Coronavirus Impact

Avni Kaul

The author is Nutritionist and Wellness Coach and Founder, NutriActivania

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