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What a Post-Pandemic Re-Opening Means for Businesses

Over the course of 2020, some businesses struggled while others soared. The pandemic certainly chose winners and losers when it came to market shifts and consumer preferences. But things appear to be rapidly changing, and businesses that had been at peak performance have seen significant declines. Several major drops in business stocks after reopening have already occurred. As a result, it appears the business landscape is yet again changing in response to a post-pandemic reopening.

There are a number of notable changes in business stocks after reopening that deserve notice. Some involve sectors that enjoys triple-digit increases in revenues during the pandemic like telehealth and EdTech industries. Others involve companies that thrived in the Come-to-Me Economy including online e-commerce and food delivery. (The read more about the Come-to-Me Economy and how it has reshaped the business world in this Bold story.) But just because things aren’t as rosy after the post-pandemic reopening doesn’t mean all gloom and doom. It might just mean a recalibration is in order.

“As we progress to the world reopening, people have now integrated [videoconferencing] into their lives in the way they work, in the way they learn, the way that they socialize. That is not just going to change.” – Kelly Steckelberg, Chief Financial Officer, Zoom

Effects of a Post-Pandemic Reopening on Remote Work and Learning

With the world in quarantine, most of us had to learnt to live our lives from the comforts of our homes. For those accustomed to commuting to an office, that likely meant dialing into Zoom or Microsoft Teams. For kids, it probably meant learning how to navigate online learning platforms. Event for those in more advanced education, EdTech platforms became commonplace. (Dive deeper into educational technology and its driving forces in this Bold story.) But in the last couple of months, significant drops in these companies’ business stocks after reopening has been noted. Despite the benefits they provided, using these services to the same extent as before isn’t likely.

Let’s look at a few of these business stocks after reopening. Over the course of 2020, Zoom increased its revenues 735 percent! But with the post-pandemic reopening, stock prices have fallen about 50 percent. In terms of EdTech, Chegg as well as other online educational platforms have seen similar declines. Chegg specifically has lost a third of its stock value in the last two months. Despite this, venture capitalists still seem bullish on these sectors in a post-COVID world. But as far as public investors, they don’t seem to be so sure.

“I think the momentum today may be sufficient to break the old system paradigms and drive meaningful change in [medicine]. Certainly, the patients have come to expect the better, faster and easier care they get with telemedicine.” – Dr. Dan Carlin, CEO of New Hampshire-based telemedicine company, WorldClinic

Post-Pandemic Reopening and Telemedicine

Similar to some other sectors that flourished last year, the telehealth industry is also seeing dramatic shifts. Several have experienced significant declines in business stocks after reopening including Teladoc and American Well. While Teledoc doubled in value during the fiscal year 2020, its stock prices have fallen by half since February. America Well, which saw a 50 percent increase in its stock prices after filing for an IPO, recently dropped 60 percent. Analysts suggest these drops simply reflect a readjustment in what had been an inflated value.

A pair of workmates socially distanced in their office
A post-pandemic reopening means some changes to business–but what kinds of changes?

While this may be the case in part, recent drops in business stocks after reopening are also due to a changing landscape of competition. Amazon recently entered into the telehealth space and plans to offer its Amazon Cares to its employees. Several other mergers and consolidations also recently took place, including Cigna’s acquisition of MD Live. These developments probably are having a larger impact on stock prices than post-pandemic reopening itself. In fact, current projections suggest this sector will go from $56 billion to $299 billion in the next seven years.

“These slumps are knee-jerk reactions and don’t accurately reflect the fundamentals of those businesses and their long-term value propositions.” – Jeff Ransdell, Founding Partner and Managing Director, Fuel Venture Capital

Other Notable Drops in Business Stocks After Reopening

Beyond EdTech, telemedicine and videoconferencing, several other sectors did exceptionally well during the pandemic. Those related to online retail were among some of the strongest winners as consumers flocked to e-commerce. Likewise, food delivery services also enjoyed revenues boosts. And online exercise apps and platforms also soared as gyms and fitness centers closed. But these companies are also now experiencing drops in business stocks after reopening. Like the other sectors mentioned, the post-pandemic reopening seems to be resulting in value adjustments for these companies too.

Several businesses reflect these changes with significant drops in business stocks after reopening. For example, Peloton has recently fallen 47 percent in their stock price as has Door Dash. Online retailers Etsy and Shopify have similarly had struggles with the post-pandemic reopening. While Shopify stick fell 26 percent, Etsy dropped 35 percent. While this volatility might be concerning for some, analysts believe these companies too will rebound. As many have noted, consumers have come to appreciate their conveniences. They may not use their services as much, but these sectors will continue to thrive.

Time to Heal and Readjust

The world was blindsided by the pandemic, and a number of businesses had to reinvent themselves along the way. Many survived by being adaptable and dynamic. Others thrived simply because they were at the right place at the right time. Regardless, the post-pandemic reopening will bring forth new challenges that again require us to adapt. This will be difficult for many companies, but perhaps hardest for the businesses that did well during COVID. But while these readjustments take place, volatility of business stocks after reopening is to be expected. It will time to settle out and reach a new equilibrium. But as always, those companies that offer the greatest value will be the ones that excel. Figuring out what value means in a post-pandemic world is therefore the priority task at hand.

 

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The Burgeoning Vegan Industry – Dairy Alternatives Are Making a Statement

Believe it or not, plant-based vegan foods are all the rage. In years past, many food experts questioned whether these types of foods would ever hit mainstream. But both meat and dairy alternatives are proving that the demand for these products are growing. In recent years, meat substitutes in the food tech industry have enjoyed growing market shares. (Read more about those plant-based meat alternatives in this Bold story.) And now, dairy alternatives are doing the same. Recently, Oatly, a maker of oat milk products, launched its initial public offering with a base valuation of $10 billion.

Notably, there are several motivations for choosing plant-based vegan foods today. Some believe these foods are more nutritious in many ways, providing additional vitamins and minerals. Others prefer such foods because they avoid harming animals. But more pressing today are the effects traditional food production is having on climate change. As one of the largest producers of greenhouse gas emissions, the food industry has come under fire. This is a major driver of meat and dairy alternatives in the marketplace today.

“[The offering of meat and dairy alternatives is] a great opportunity to combine health with sustainability. It’s also a great growth opportunity.” – Stefan Palzer, Chief Technology Officer at Nestlé

Oatly’s Public Offering Highlights Popularity of Plant-Based Vegan Foods

On May 20th, Oatly debuted on NASDAQ with an initial share price of $17 based on its own $10 billion valuation. Within hours, it was traded at 30 percent higher at $22 a share. The company was originally founded in 1994 when Rickard Oste, a Swedish professor in food chemistry and nutrition, founded Oatly. They successfully created dairy alternatives that consisted of oats, water, and enzymes that mimicked real milk. While Oatly has seen sales increase since that time, its most significant growth has actually been in the last five years.

In 2016, Oatly received a major boost with venture capital support from major players. Verlinvest, an investment firm that invests for families involved in the Anheuser-Busch InBev conglomerate, got involved. At the same time, China Resources, a Chinese government-owned investment entity did the same. These two now have the majority share of stock in Oatly with the highly reputable Blackstone owning 8 percent of shares. All of this helped enhance Oatly’s appeal in its debut while giving other plant-based vegan foods a boost as well.

“I don’t see anyone else taking that leadership position the way [Oatly! is]. We are really serious and ambitious about what we’re going to do here.” –  Toni Petersson, CEO of Oatly!

The Growing Plant-Based Vegan Foods Industry

The growing sales of meat and dairy alternatives have been consistent now for some time. Several companies besides Oatly are attracting big investments from companies and celebrities alike. For Oatly specifically, Oprah, Jay-Z, Natalie Portman, and Howard Schultz have invested in the company. Other companies are also attracting big dollar investments, such as Beyond Meat, Impossible Foods, and JUST, Inc. (Take a deep dive into Impossible Foods in this Bold story.) Overall, these types of food tech companies have attracted over $18 billion in funding support. Plant-based dairy alternatives alone had revenues exceeding $640 million in 2020. Investors no longer question whether plant-based vegan foods will be around in the future. They’re now asking how much of a market share they will comprise.

Some fake burgers that make me sad
Plant-based vegan foods–once hard to find–can now be found almost everywhere.

In terms of dairy alternatives, the market for rice and oat milk is estimated to be $2.5 billion. Globally, this industry is around $9.5 billion. In the next four years, this segment of plant-based vegan foods is expected to have exponential growth. Projections for the U.S. suggest the industry will reach $3.6 billion with global markets worth over $11 billion. All of this suggests a larger segment of the population will progressively embrace plant-based vegan foods. Whether they are passionate about being vegan or not doesn’t matter.

“We thought that if [Oatly] could convince [investors] that it’s as profitable (and in the long-term even more profitable) to invest in a sustainability company like Oatly, then all the other private equity firms of the world would look, listen and start to steer their collective worth of 4 trillion U.S. dollars into green investments.” – Toni Petersson, CEO of Oatly

Market Growth Driving Competition

While the popularity of plant-based vegan foods has increased, so has the competition. Oatly is just one of many firms that offers dairy alternatives. Therefore, the challenge for Oatly going public is to convince investors that its products are unique. Certainly, having reputable venture capitalists behind the company and high-power celebrities help. But even the company appreciates the challenges it faces over time. This not only includes other small companies producing dairy alternatives but well-established ones as well. Companies like Nestle and Unilever have significantly more resources they could leverage in the plant-based food industry.

Nestle has already introduced some plant-based vegan foods in its list of offerings. One of these includes Wunda, a high-protein milk substitute made from yellow peas. Unilever is also expected to enter the market with plant-based vegan foods planned before 2027. Many believe a small company like Oatly may enjoy some advantages in versatility and speed. However, this may not be the case. For example, Nestle took less than nine months to develop, test and market Wunda. Based on this, the market involving dairy alternatives is going to be a highly competitive one. Staying on top won’t be easy for new entrants.

Expanding Dairy Alternatives for All

Before going public, Oatly noted that they had losses in 2020 despite major increases in sales. This occurred because the company invested in new factories, more extensive marketing, and more diverse products. Among their new products now offered are yogurts, ice creams, and cream cheese. With the anticipated $1.4 billion gained from the company’s IPO, Oatley plans to increase its presence in the U.S. and China. China alone is seeing a 450 percent growth in demand for plant-based vegan foods. Whether Oatley continues to excel in this evolving market is unknown. But the market itself is solid and unlikely to go anywhere but up.

 

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The Continued Rise of the Mental Health App Business

In the last year, the mental health app business has been booming. COVID anxiety contributed significantly to its rise, sending many to explore mental health alternatives. Likewise, consumer acceptance of telehealth services and remote care also boosted its use. (Dig deeper into the telehealth industry with this Bold story.) Seeing this rise in consumer demand, many companies invested in mental health app development. As a result, the market is now flooded with various platforms designed to help with a range of mood-related issues. Without question, the landscape has changed significantly in a short amount of time.

While this is great for the mental health app business in general, many have concerns about such rapid growth. Some mental health experts raise questions about the actual quality of these platforms and their benefits to the public. Others pose questions about patient privacy rights that may be neglected during mental health app development. Despite this, investors are still flocking to these platforms, anticipating their value will continue to increase in coming years. And some forecast these mental health apps may actually become the new norm in terms of psychiatric care.

“It’s essential we recognize the massive leap forward in the use of mental health apps by citizens during the pandemic, and increasing evidence of their popularity and efficacy. Research has found that digital therapies can achieve comparable outcomes to face to face therapy when the content is right.” – Liz Ashall-Payne, Founding CEO of ORCHA

Investors Fueling Mental Health App Development

Surveys over the last year have documented a major increase in consumer use of mental health platforms. But consumers aren’t the only ones searching for the latest and greatest mental health apps. According to research, there was a 6500% increase in physician searches for these platforms. This is the kind of information that investors and venture capitalists pay attention to. If providers as well as patients are finding value in the mental health app business, then so should they. And its with their support that mental health app development is moving at a record pace.

Several companies in this sector have recently landed nice funding for future development. Wysa, an emotionally intelligent AT platform, received $5.5 million in additional Series A funding lately. This brings their total funding to $9 million. Mantra Health, designed for teen mental health issues, received $3.2 million in funding recently as well. And Joon Care, which caters to teens and young adults, enjoyed $3.5 million to aid in its mental health app development. With these just being a few such companies, it’s clear the mental health app business is doing quite well.

“Sixty percent of the people who come and talk to Wysa need to feel heard and validated, but if they’re given techniques of self-help, they can actually work on it themselves and feel better.” – Jo Aggarwal, Founder and CEO of Wysa

First Do No Harm – Concerns for Mental Health Apps

The use of mental health apps covers a wide variety of conditions. Anxiety and sleep disorders during COVID encouraged many to consider these platforms for assistant. Other concerns like depression, chronic pain, relationship problems, and suicide prevention also promoted its use. Thus, based on some reports, only about 10 percent of users actually required an actual diagnosis. Because of this, the mental health app business is not looking to replace therapists but instead compliment their services. Mental health app development is therefore focused mostly on engaging users, providing general guidance, and encouraging expression. (Algorithms and artificial intelligence are being leveraged to treat mental health issues–read how in this Bold story.)

A therapist paying more attention to his tablet than his patient.
The rise in telehealth and remote care has prompted an uptick in mental health app development.

There is some concern, however, that some mental health platforms go too far. The Organization for the Review of Care and Health Apps (ORCHA) examines whether these apps are beneficial and appropriate. By their account, the mental health app business falls short in this regard. Less than a third of these platforms are considered acceptable by ORCHA. Not all of the companies involved in mental health app development are this way. Wysa, for example, screens patients with valid measures to detect serious problems. If present, users are encouraged to see a licensed therapist. This feature, among others, led to the NHS’ recognition of Wysa as meeting clinical safety standards in the UK.

“Our results confirm that app stars and downloads – even for the most popular apps by these metrics – did not correlate with more clinically relevant metrics related to privacy/security, effectiveness, and engagement.” –  John Torous, Director and Co-founder, Digital Psychiatry Division, Harvard Medical School

Privacy Issues in the Mental Health App Business

Many assume that because the mental health app business deals with health issues, it must abide by HIPAA. However, that’s not necessarily the case. Patient privacy may or may not be protected when using these platforms. Consumer Reports recently reviewed several such apps an found many shared information with third parties including Google and Facebook. They did not find evidence that specific mental health complaints were shared. But the fact that someone visited such an app was probable. This was not true of every mental health app development entity, but it was common.

Clearly, quality mental health app development companies recognize the importance of patient privacy. But the regulation of these apps has not evolved to the point that patients can assume their privacy rights are being protected. In contrast, such rights are guaranteed when seeing a licenses mental health professional. If someone is simply looking to express their frustrations and worries in a non-revealing way, these apps may be fine. But if more detailed and intimate information is being shared, an AI therapist may not be ideal.

Finding a Niche in the Mental Health Services Picture

With so many mental health platforms available, it’s unlikely all will thrive in the current marketplace. However, companies like Wysa that are focused on quality services may. Their mental health app development anticipates an evolving platform that progresses in its abilities. Through machine learning and therapist input, the platform is expected to get better. Likewise, Wysa also plans to eventually develop its own mental health therapist provider network. This will work in conjunction with its app. These types of pursuits are what makes the future of the mental health app business exciting. And it’s also a reason investors remain bullish on these companies.

 

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