Today, no business has been spared the backlash from the global coronavirus pandemic. Entire industries have been brought to heel – massive industries like the hospitality sector, travel sector and even the oil sector.
So, in an effort to try and assess the situation across the affected sectors and businesses, AMEinfo has conducted a series of interviews with notable regional and international tech companies of different sizes. In this article, we speak with UAE robo-advisor startup Sarwa, which earlier this year closed an $8.4 million Series A round of funding.
Make sure to click on the #COVID19Tech tag to access all the articles in this series.
Q & A with Mark Chahwan, Co-founder and CEO, Sarwa
How have the pandemic and remote working affected your daily operations in terms of:
• Revenue and customer investments
We have managed so far to still achieve growth and hit our targets. Sarwa is focusing a lot on educational initiatives to create content on how to protect and build [clients’] wealth in the current environment. We have created a page dedicated to market volatility and how to navigate it. It includes articles, videos as well as links to our webinars. This helped assure the community around us, and made it clear that passive investing is a long term plan and ultimately the market rewards patience. We also make sure to communicate with our clients regularly and have open channels for feedback.
From a customer perspective, being broadly and globally diversified has generally and historically led to consistent returns with less risk. This holds true today, our long-term philosophy combined with discipline and smart automation stays the same, and it’s led to good results for Sarwa clients and reflected in good behavior in times like this.
• Operating costs
We were lucky to have closed a round of investing recently, and we have runway. That said, the pandemic is putting the livelihoods of many startups at risk and we are conscious that we need to be careful with our operating costs. As a startup, you can look into creative ways to cut costs and hold on to any spare cash without having to drastically change the way you operate.
Sarwa is a lean company and everyone onboard is part of the founding team. This is to say that everyone works hard to make sure that all aspects of the business are run efficiently and seamlessly. Sarwa is a hybrid robo-advisor which means we use technology to offer affordable investing to everyone, and accessible human advice when needed. Our customer support and human advisory team have been instrumental in times like this. They are at the core of the effort done to manage the current situation and have been doing a great job.
What has the company’s experience with remote working been like so far?
Very smooth. As a technology company, we were already built to be resilient to the change in the working ‘space’ as we already operate fully online. Our team is equipped from the get-go to handle remote work. We use many tools for daily communication and have regular meetings to align on tasks and overall direction.
What are your short-to-mid term plans to address issues arising due to the global lockdown?
In the short term, business as usual! Our clients continue to make us proud by being resilient and thinking long term – in March we’ve seen the highest number of client deposits since inception. When it comes to our day to day operations nothing changes. We are still committed to meeting the same obligations we have towards our clients. In terms of strategy, we have a clear roadmap that we follow: it details both short, medium and long run projects.
That being said, we also ran readiness scenarios to see what the best and worst case projections of the impact on the business and what we can do to mitigate. We did a budget reduction exercise, and relooked into our strategies and kept the focus on core projects that serve the long term growth to the business.
What will the long term impact of the pandemic be on your company and your sector?
When you start investing with Sarwa, we assess your risk profile and recommend a diversified portfolio that reflects it. Our service is rooted in passive investing, and the core of it is around goal-based planning. The current situation will only strengthen the value proposition of the importance of diversification and investment based on risk profile. If you are a short-term investor, then your portfolio will inherently be less risky. If you are in a portfolio that has more exposure to stocks, which is considered more growth and more risk, then you are in it for the long term and the short term (even if it is a couple of years) won’t have an impact on your long term strategy. As a matter of fact, the current situation is often seen as a buying opportunity by long-term investors.
Looking at a future after the pandemic, what are your essential takeaways from the crisis and how will they reshape your business/operating model going forward?
With the global economy on lockdown, the biggest challenge for businesses will be around raising funds at the right valuation in this environment. The deal terms might shift more in favor of investors. We will see VCs focusing more on sustainable business models and profitability. At the same time, the current crisis is fueling a new wave of innovative startups that will focus on finding solutions to new emerging problems. This is definitely changing the trajectory of the ecosystem.
For Sarwa, communication with our clients is key, whether it is direct communication through our team, or online content. We will lean more on education and ensuring that our clients feel well supported and to ease concerns.