Startup survival mode may last 15 to 18 months, says Runa’s CEO

Contxto – Human resources is facing multiple challenges courtesy of Covid-19. Massive layoffs means HR staff have to carefully calculate severance pays and discharge employees from their books and systems. Now add remote hiring into the mix. Simultaneously, HR staff must deal with payroll punctuality as their “To Do List” only grows longer. 

As a platform prepped for more efficient payroll management, Mexico City-based Runa is quite familiarized with these problems.

The startup’s CEO and Founder, Courtney McColgan shared with Contxto just how Runa‘s plans have shifted and what startups can expect as the world prepares for an economic slowdown. 

Covid-19’s mixed results

“Uncertainty is without a doubt one of the biggest impacts [of Covid-19],” said McColgan, in written correspondence.

“The global economy is at an unprecedented moment that will leave mixed results. Businesses centered on food delivery, healthcare, as well as remote education and training have been far less affected [by the pandemic]. All the while, other industries have seen a drop in sales.”

• Related article: Mexico’s HR startup Runa unleashes more features for its platform

Rightly so, since early March, when Covid-19 began sweeping through Latam, last-mile delivery startups like Rappi and iFood began reporting an increase in delivery volumes.

Likewise, edtechs like Crehana and Platzi saw a surge in users on their platforms. And of course, startups that remotely tender to physical and mental health are in the limelight for the first time.

But the current state of affairs for startups can’t be lightly compared to the previous economic downturn. 

“If we observe the 2008 financial crisis, venture capital funding took somewhere between five to seven quarters to reach pre-crisis levels,” noted Runa’s Founder.

“If we compare that scenario with the ongoing contingency, we’d say that the next 15 to 18 months will be difficult for businesses to consider an injection of external capital. That means most startups will need to extend their existing capital for this period.”

Enter many startups’ current state of survival mode, priority changes, and product pivots.

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Startup Runa to digitize all payments for HR

For Runa, there too has been a shift in gears. To help its users cope with Covid-19, it launched a content page filled with advice and tips for remote teams. Anxiety management, leadership, even how to hire at a distance are some of the topics it addresses.

Runa’s CEO also said it’s focusing on product development. Correspondingly, the startup is working to make it possible for its platform to process payments for all things HR-related. Its first step in that direction was the launch of a feature for businesses to enroll their staff into Mexico’s healthcare system earlier this year.

“We’re focusing all our efforts into tech development so as to be ready for the post-pandemic period and offer a better product that responds to the needs of businesses for this recovery period,” concluded the executive.

Related articles: Tech and startups from Mexico!

-ML