Let’s face it, times are tough. We are in the middle of a major health crisis that, depending on its outcome, could lead to the biggest economic crisis in our recent history. Dark predictions are not popular, yet many of them come true day after day.

Like other VCs, we have spent four busy weeks working hand in hand with our startups to navigate through these uncertain times. Slowly understanding what lies ahead is not enough — there is little or no time to react and act — which is the most challenging.

The only way for startups to navigate through this “fog of uncertainty” is to draw up scenarios and seriously prepare for the worst disruptions and changes in activity. Most importantly, these scenarios must be carefully studied so that startups (and VCs) can reinvent themselves — we are not simply faced with a virus that comes with winter and goes with summer. The World is on the verge of a major power shift that was already well underway before and which the health crisis has only accelerated. Only one thing is certain: the next normal will be very different from the current one and startups have a role to play in defining it.

That’s why we have decided to share our baseline scenario with you. It’s not a prediction but it’s what appears to be, for us, the most likely path at a given time. In our series of articles, which we will post in the coming weeks, we will delve into the impact of Covid-19 on different industries. We hope this will help startups reinvent themselves as soon as the initial storm passes.

Our baseline scenario

Phase 1: Quarantine period — Fighting through the sanitary crisis

The quarantine period will end when the number of infected patients is sufficiently low and when secondary peaks can be managed by measures other than quarantine. In Wuhan, the quarantine period lasted 10 weeks. So, we can say that the best-case scenario for the EU is 10–12 — we expect quarantine to end beginning of June in France and 2–3 weeks later in the UK. Partial quarantine measures may allow to lift lockdown earlier, with specific business activities resuming as early as the end of April, but there is little visibility on that for now ; it could increase the risk of future epidemic peaks. Currently, France and the UK do not plan to partially reopen until the second week of May.

Phase 2: Safe-mode period — Learning to co-exist with Covid-19

Once lockdown is lifted, the world will go through a “safe-mode” period during which the economy will operate at limited capacity. People will return to work, many business activities will resume (with the exception of the travel, tourism and event industries) with the risk of a second epidemic peak.

With the economy running at 85–90%, we also risk a prolonged economic depression. A sharp rebound seems increasingly unlikely, especially since government measures are unlikely to prevent bankruptcies and unemployment. Injecting money and loans will not fully revive an already over-indebted economy, and supply and demand may not return to pre-crisis levels due to the remaining virus risks. This period could end at best by the end of Q4 2020, or even 2021, until a vaccine is developed and distributed at scale.

Phase 2 will be even more challenging than the quarantine period, but this is also where new opportunities will arise. As everyone will be forced to change their behaviour for a extended period of time, new habits will emerge. Trends will die, appear or strengthen in all sectors.

Phase 3: Period of recovery — Development and distribution of a vaccine at large-scale

It is difficult to determine when exactly the period of recovery will begin. It depends primarily on the distribution of an effective vaccine, which is best done after 12 to 18 months (i.e., until 2021). By that time, the trends emerging in phase 2 will have become the new “normal”.

What it means for startups

Phase 1

We are well into Phase 1, so many of these measures and actions should already be in place.

• Focus on cash and on reducing your burn rate, with the sole aim of maximizing runway. At Aster, we recommend that our portfolio companies review their forecasts for the next 24 months and consider the poor outlook of Q3 and Q4 2020
• Communicate regularly with your customers and existing investors, they will both provide you with essential information on what’s next
• If you can afford it, transition parts of your business to support the war economy to keep the country’s economy going while addressing the health crisis. If you can’t afford it, freeze your activities for three months with minimum service or furlough.

The key is to proactively look out for new opportunities. In the coming months, many trends will disappear, and many will emerge. Ask yourself the following questions:

• What are my customers facing right now? What is the impact of Covid-19 on their business?
• How can I help them restart their business as soon as possible?
• Who are the people least affected by the crisis?
• Can my existing product be useful to other customer segments? To other markets?
• Are there features I had planned to release in the future that suddenly become more relevant now?
• Can my product be useful to a completely different industry?

It’s important to adopt an even more customer-centric perspective than before. We have seen many 180-degree turns recently as companies shift from B2B to B2C or even change their target customers. This was the case for many food and logistic startups that saw their revenue drop to zero in one week but returned to their pre-crisis revenue levels two weeks later by changing customers.

Finally, if your company’s activity has not stopped, make sure to implement the best health and safety guidelines, in order to keep your team safe and the business up and running.

What does this mean for fundraising?

It’s probably the worst time to be raising funds right now. VC are spending most of their time working hand in hand with their portfolio companies or their LPs. So, we recommend raising later, if you can. If you can’t, it’s really important that you factor the crisis into your forecasts. Assume the worst and build options. You can’t ignore the fact that half of the world’s population is locked in.

Phase 2

• Keep focusing on cash, strict health and safety guidelines and transparent communication with your team
• Constantly reassess your customers’ priorities in order to turn to new products, new features and new customers if needed
• Secure your value chain, ease the work of your partners, customers, suppliers and employees. The goal is to stabilize operations in the light of the ever-present virus. Keep in mind that one of the major challenges will be the refusal of people to go back to work because they don’t feel safe enough. There will also be undisciplined people wo will behave in a risky manner, as if everything was over.
• Consolidate and implement the pivots identified in phase 1, whilst relaunching the “old activities” if any remain
• Develop a Business Continuity Plan with even more levels of contingency than usual

What does this mean for fundraising?

During the safe-mode period, fundraising should slowly return to normal. While the situation of many funds will not be very good, others will have updated their investment thesis with a focus on counter-cyclical sectors that are recovering quickly and on new trends.

Phase 3 (Conclusion)

If Phases 1 and 2 are well managed, this will be the new golden age for surviving startups and VCs:

• VCs are well aware that the post-crisis deals are the best ones: there are less funds, so less competition and you are able to IPO anything you want in 10 years’ time at the peak of the next bubble
• Startups have the opportunity to follow and create new trends in a context of weaker competition

Overall, most countries in the world will suffer tremendously and will have to rebuild a lot from scratch. Some might argue that humans don’t change and that we may simply rebuild as before. However, we believe that many major trends, such as climate awareness and the digital transformation of the industry for instance, will accelerate and become more widespread. And as countries will reinvest in future growth engines, policymakers will need to follow them too.

We are on the verge of a huge shift in the way we move.

Car ownership has long been perceived as a symbol of independence and played an important role in marking one’s success. However, times are changing.

Today, it’s becoming increasingly easier to get around cities in private vehicles without having to own one. Car renting, carpooling, carsharing, and other alternative car ownership platforms have led to billions of new mobility patterns, which is in turn shaping the automotive industry. And for younger people, buying a car is beginning to be viewed as both a hassle and a waste of money (not to mention an environmental disaster as more people are living in cities!)

Seed/Series A startups and corporates are fundamentally different beasts.

The two usually operate on completely different wavelengths on several fronts:

• Inherently risk-prone vs. risk averse
• Quick vs. slow decision-making cycles
• Needs cash to survive vs. cash matters, but not at the same scale

So it’s no wonder that fostering a successful collaboration is often challenging and unfruitful when a startup is looking to engage with corporates.

Yet, as a B2B SaaS startup, landing business with corporates is a matter of survival. But how do you identify and connect with the right corporate client? How do you get your foot in the door? How do you improve your odds when it comes to converting pilots into long-term partnerships?

Having fostered a great deal of partnerships between startups and corporates here at Aster, we’ve decided to share a few tips to help founders at the Seed/Series A stages optimize their sales efforts and make the most out of their relationships with large corporates.

1. Target the right companies — it’s NOT a numbers game

If you are selling SaaS to mid-market companies and large corporates, chances are you have many potential targets. Given the low conversion rates, there is a tendency to believe that the best way to land deals is to maximize the number of companies you engage with.

But it is important to consider that large corporates have different and generally more complex approaches when it comes to working with startups. For large companies, a Proof of Concept (PoC) is a must before scaling a startup’s solution within their organization, while mid-market companies take more of a “self-service” approach, moving more quickly from trial periods to commercial contracts.

As a founder, chances are that most of the time you will have only one point of entry into the organization (let’s call him Bob).

If Bob has expressed an interest to test or buy your product, congrats! But Bob will rarely be your only customer or user within the corporate. It’s also unlikely that he’ll be able to commit to buy your product on his own, and even less likely that he’ll oversee the integration of your product into legacy systems.

In reality, going from your first conversations with Bob to the ideal roll-out of your solution throughout the company will involve several decision-makers — all of whom have different interests, agendas, expectations and fears.

The solution? Mentally break up the large corporate into bite-sized chunks. It will make it easier for you to identify the gatekeepers and then turn them into gate openers.

Here is a simplistic scorecard of the different gatekeepers and their own interests:

Source: Aster Capital

The e-scooter has strong pricing ratios between CapEx + OpEx compared to its bike, e-bike and e-moped counterparts. That’s why it is often perceived as the sweet spot of the free-floating mobility world. And yet, when digging into the unit economics of the first generations of e-scooters, we can begin to understand why operators are struggling to cut the fierce cash burn.

The breakeven for e-scooters takes almost 4 months, and with hardware durability issues and vandalism, operators are unprofitable in many cities. While we expect new generations of e-scooters to have longer lifetimes, we’ve seen that these issues remain as some of the key hurdles that makes current e-scooters uneconomical.

The first generations of e-scooters have struggled in reaching profitability

At Aster, we’re really into electric mobility and we’re happy to see it’s picking up pace! E-micromobility is adding new layers of flexibility to urban transit, and more than half of all passenger vehicle sales are projected to be electric by 2040. That said, one key hurdle remains for EVs of all sizes: charging.

It goes without saying that the operating time for an electric vehicle is limited due to charging. For passenger cars, this means people are worried they won’t be able to use their vehicle when they need it. For micromobility operators, charging creates hefty operational expenses and a pool of untapped value for when their vehicles are recharging and off the street.

In comes battery swapping, enabling EV owners and operators to replace depleted batteries with fully charged ones in less than a couple of minutes. But which players are developing battery swap solutions? Where does swapping struggle and where can it add value? What could battery swapping look like in the future?

We’ve studied up on battery swapping over the past couple of months, and after digging into the value chain and exchanging with startups in the space, we’d now like to shed some light on these questions.

The battery swap startup landscape and value chain

We found that the battery swap value chain could be broken down into three main segments: (1) vehicle design and manufacturing, (2) battery swap station design and installation and (3) micromobility operators using battery swapping in their business. Most of the startups we came across operate in one segment of the battery swap value chain, except for a few players (such as Gogoro and NIO) that are integrated in both vehicle manufacturing and the swap station design and installation.

The companies we’ve come across offer battery swap solutions for two main use cases, including passenger cars and micromobility.

Companies have struggled in scaling passenger car battery swapping

Some players have attempted making passenger cars with swapping capabilities, the most infamous of which being Better Place. After raising roughly $800 million, the Israeli startup ended up bankrupt in 2013. Tesla also tested swap stations in 2013 for Model S owners, which it ultimately scrapped and deployed supercharger networks instead. Now NIO is taking a swing at passenger car battery swapping, but has had a tumultuous year with significant staffing cuts and struggling financials.

So why is it so challenging for companies to scale electric passenger cars with battery swap capabilities?

We believe there are 3 main reasons:

1. High installation costs: Building a reliable battery swap network is CapEx intensive. For Better Place, each swap station was initially projected to cost $500k but ended up with a price tag of roughly $2 million. These costs are remarkably higher than direct-current fast charging (DCFC) stations, where installation costs vary from roughly $25k to $200k.
2. Complex go to market strategies: OEMs must agree with battery swap startups to build vehicles that are specifically suited for the design of the swap station. Even more, as there is no battery standardization between different electric cars, the stations will likely have unsustainable inventories of multiple battery types as new cars are released.
3. Little acceptance from end–users: It seems increasingly unlikely that electric car owners will use swap stations as plug-in charging networks are becoming faster and more ubiquitous. In the case of Tesla’s pilot program, only 4–5 out of the first 200 participants were interested in swapping batteries. The low interest level was likely a result of the fact that a Model S could be charged for free and at high speeds (80% capacity in about 40 minutes), while in the swapping pilot, Tesla owners had to pay and book appointments to get a full charge, making the overall swap experience less compelling compared to Superchargers.

However, battery swapping can add a lot of value for money-losing micromobility startups

Micromobility is expected to boom in the coming years, with estimates of the e-scooter market alone reaching $40-$50 billion by 2025. But startups in the space need to move quickly to improve their unit economics to capture this market, as achieving profitability has been a significant hurdle so far.

Charging is a large operational expense for e-scooter companies, especially for those using a “crowdsourced” model, where individuals are paid to locate, recharge and rebalance scooters. Bird is an example of a company that has suffered as a result of this model. At one point in 2018, 47% of their total cost of revenue went towards charging expenses as a result of the crowdsourced model.

Other e-scooter companies have opted for hiring operational teams instead to collect the e-scooters and take them to charging and maintenance facilities. However, this model still requires that the scooters are off the streets for several hours to recharge, reducing overall revenue potential.

This is where battery swapping can make a meaningful difference. It adds two layers of value for micromobility operators, as it can reduce charging costs while also maximizing vehicle uptime. Swapping can be used in two different models:

1. Operational battery swap teams: Companies can hire operational teams that are tasked with swapping batteries and taking depleted ones to a charging facility. This model has recently caught the attention of operators in the space and is currently used by Uber’s JUMP. Skip recently announced they plan on switching to this charging model as well.

2. Swap stations: Operators can also opt to deploy stations or kiosks in retail stores or city streets, where users are incentivized in the form of ride credits to swap the batteries on their own.

Operational swap teams and swap stations can reduce charging expenses as a percentage of revenue per ride

But why would battery swapping work better in micromobility than it has with passenger cars? For one, it’s much easier for micromobility operators to agree with light vehicle OEMs to create battery swap capable scooters and bikes compared to passenger car OEMs. Also, battery swapping in micromobility can enable an incentive system where end-users are encouraged to exchange batteries to earn ride-credits, a mechanism that did not exist for passenger car swap stations.

So what’s next for battery swapping?

Passenger car battery swapping remains complicated due to high installation costs, complicated go to market strategies and unclear user acceptance. However, as the e-scooter and broader micromobility markets grow and consolidate, operators will be on the lookout to boost margins using operational innovations. We expect battery swapping to play an important role in helping these companies remain competitive by beefing up their unit economics and maximizing vehicle uptime.

But which battery swapping model will be adopted by operators? What will the role of hardware manufacturers be as e-scooters and e-bikes move towards battery swapping? Will operators develop their own swapping technology, or rely on 3rd parties such as Pushme or SharingOS? Will customers be swapping batteries in the future?

JUMP recently hinted they are considering moving towards user-based battery swapping. Although this charging model makes sense from a unit economics perspective, several hurdles remain, including user acceptance, creating a sustainable incentivization strategy and finding locations to place swap stations.

Finance is an industry with few women and Venture Capital is no exception. They are scarcely found on startup boards, startup pitch nights and VC advisory committees.

According to the joint findings of Boston Consulting Group and Sista, women make up just 14% of all partners in the top VC firms in France; half of which have no female partners. Incidentally, only 2% of all VC investment since 2008 has gone to French-backed female-only founder teams.

Encouragingly, over the past few years, a host of new initiatives have sprung up supporting diversity and strengthening the presence of women in the industry.

The world’s largest global directory for women in venture capital to find each other, connect, and collaborate.

The Global directory of Women in VC is one such example. Created by Jessica Peltz-Zatulove and Sutian Dong, it’s the world’s largest directory for women in Venture Capital — which includes 1,700+ female investors across 46 countries. Their mission is to give women around the world the tools to better find each other, connect, and collaborate. This is how we connected with Costanza (Cathay Innovation) — having recently moved to Paris from the US — who wanted to meet other VCs.

In many cities across the globe, VC women meet through local communities — take Berlin, for example: meetups are organized every other month by Marie (Fly Ventures). There was nothing like this in the French capital.

That’s why we decided to build the first community of female VCs in Paris

We started by cold-emailing all the women in Paris-based VCs with a call to action — and we were thrilled with the number of positive responses! Gabrielle (Blackfin Capital) implemented a communication channel whilst Cecilia (Daphni) and Edna (360 Capital Partners) told us about their initiative with Tatiana (Sista) of launching office hours and meetups to support female founders in partnership with VCs.

We gave the community a name — Paris VC Ladies — and organized an official launch event on September 25, 2019 in which 100+ women with varying levels of seniority came together. It was the perfect opportunity to explain everything from the reasons for creating, and purpose of the community, through to the long-term plans to support diversity and inclusion.

We wanted to answer two questions:

1 — How can we thrive in a male-dominated industry?

2 — What can we do to support and empower female entrepreneurs?

We were honored to welcome Roxanne Varza (Director of Station F), entrepreneur Caroline Ramade (CEO of 50inTech) and investor Valentine de Lasteyrie (Partner at Fiblac and co-leader of Sista), who shared their success stories and engagement to close the gender gap. Their speeches were then followed by enthusiastic discussions about our next steps over refreshments and appetizers from Le Vélo du Soir.

So, what are the next steps we outlined?

• To arrange quarterly drinks to continue inspiring one another
• To organize training workshops delivered by partners of the community
• To help the community flourish by encouraging active involvement in sharing content (articles, recruitment and investment opportunities) through the Paris VC Ladies’ communication channel
• To support (in partnership with Sista) promising female entrepreneurs by giving them advice on their business plans and pitches

We truly believe the challenge of empowering female entrepreneurs and investors is one and the same. That is why Paris VC Ladies will be partnering with existing initiatives already supporting women entrepreneurs such as Sista, StartHer, Willa, etc.

We would like to thank French Tech Central, for kindly offering to host the event, and VC sponsors Aster, Blackfin Capital, Cathay Innovation, Demeter and Educapital for their support — without whom, this event would not have been possible.

ekWateur, the leading independent and alternative supplier of green energy, raises 10.6 million euros.

These funds, raised from Aster, historical and new investors (1 million come from its record collaborative fundraising on the Sowefund platform) will enable to accelerate its growth, develop new offers and above all continue to defend its vision of a successful ecological transition.