As the business world struggles with the knock-on effects of the COVID-19 crisis, we sit down with Matteo Scarabelli, Head of Investment at L Marks, to discuss possible opportunities that the post-COVID world could hold for agile start-ups.  

Talk of the effects of COVID-19 on the business landscape are unavoidable these days, but refreshingly, Scarabelli takes an optimistic view. He thinks that there are plenty of opportunities that are already emerging from the current crisis 

Online retailers are the obvious winners right now,” claims Scarabelli, but the crisis is also an opportunity across different industries. For example, mortgage challengers spring to mind – definitely an area to watch – and of course online payment solution providers could find space for real growth.” 

For now, COVID-19 has had little effect on L Marks’s innovation initiatives, though they have had to adapt. For example, the move by Lloyd’s Lab to initially run the Pitch Day remotely with 24 companies successfully delivering remote pitches, and now with the 12 selected start-ups experiencing the entire programme virtually. Digital innovations have created a new way of operating for start-ups and investors alike.  

FinTech and Retail Tech are such major sectors, that “COVID will impact them massively in different areas,” Scarabelli says, “but FinTech and Retail Tech are also foundational for everyday life […]. The weight of these 2 sectors is one of the reasons that I was so keen to be a part of the French Fintech & Retail Tech Tour.”  

“The relationship between corporates and start-ups is constantly evolving, and we’ve seen incredible change in the last 4-5 years,” Scarabelli shares. Back in 2018 Jonny Combe, then General Manager of Product and Channel Development at BMW, spoke of a culture clash between corporates and start-ups, but Scarabelli is convinced that this is no longer the case.  

Corporates are now much more aware that they can’t do everything themselves – they lack the speed and agility of start-ups. Normally, our programmes run for 10 weeks but some of our start-ups took just 6 weeks to test their solution with a retailer. They ran a small pilot and successfully demonstrated their superiority over their two direct competitors and over the retailer’s internal tools. Start-ups are an incredible network of talent which corporates are struggling to tap into.”  

Scarabelli puts this improved relationship down to several things, from the new generation of C-level corporates who are more tech-savvy & open to digital innovations, to corporates becoming more familiar with the processes and intricacies of collaboration. Start-ups are no longer seen as a threat, but rather an opportunity for innovation, collaboration and improvement.   

Fintech & Retail Tech hold particular interest for Scarabelli. He considers it logical for the FRTT innovation programme to work with start-ups across these sectors in which corporates are faced with many common issues. Such challenges include the transition to online, data usage, customer engagement and customer interaction 

Scarabelli is confident that a partnership with the right startup could be the answer for corporates looking to improve their KYC (Know Your Customer) processes and their customer experience through internal optimisations. 

For many years, the press has been talking about a “Retail Apocalypse” which is now being sped up due to the ongoing COVID-19 crisis. Finding the right innovations and solutions is not just a way for retailers to slow down the decline but is a matter of their survival.    

Lots of Brick-And-Mortar retailers, such as Primark, do nocurrently have an online shopping platform. Scarabelli predicts that they might consider moving online, but that “it won’t be a revolution, just an evolution.  

Brick-And-Mortar stores will continue to exist, but they’ll adapt, offering experiences and not just products. That’s where partnerships with start-ups can really be effective,” he acknowledges, citing the successful collaboration between WeFiFo & Waitrose who have launched supper clubs in Waitrose stores throughout the UK. “It’s a great example of how shops can evolve and tap into new markets and areas.” 

For its part, finance has had fewer visible failures than retail. Whilst acknowledging this, Scarabelli is quick to point out that there has been huge visibility in terms of new and emerging playersCorporates are realising that they have alternative, non-traditional assets, and are looking for ways to exploit these. Across finance, there’s fresh attention being paid to launching new products and business lines that change their customer interactions. 

Watch this space to see how Business France’s Fintech Retail Tech Tour will support the participating start-ups weathering the COVID crisis.