Israeli tech investor Viola says companies are cutting marketing, putting hold on hiring amid covid-19

Although most venture-backed companies are still learning how the coronavirus pandemic impacts their business, Viola's study shows a growing number are affected.

Investors are finding that a lot can change in a short amount of time in this era of covid-19.

On March 11, in an attempt to understand the effects of the pandemic on the Israeli tech scene, Israeli tech investor Viola sent out surveys to HR and C-level professionals. Only 5 percent of the 150 responses said they were already seeing a major impact.

Viola conducted another survey a few days later and released a new study over the weekend. The number of companies already seeing a major impact on business has risen to 33 percent. Specifically, 14 percent of the 135 respondents in the second survey said they anticipated not meeting Q1/Q2 budgets. And 19 percent expect to miss the entire year.

“The pace of change in the two polls after a few days shows that momentum is building,” said Viola Ventures general partner Daniel Cohen. “More and more companies are seeing how they’re affected.”

The poll results are available on the firm’s website.

Cohen acknowledged that scaling a start-up in these times is going to be difficult in certain market verticals, but he added that companies are taking action to help shore up business. This includes instituting a hiring freeze, and aligning the budget with new expectations, which includes cutting back on marketing.

In a video call with portfolio company CEOs, Cohen said executives talked about how they’re learning to communicate with employees and how to handle the new work-from-home lifestyle. Viola Ventures invests in Israel tech companies, some of which have operations in San Francisco and New York.

“This is new for everyone and companies are looking for direction and thought leadership,” Cohen said.

Cohen, who joined Viola Ventures seven years ago, has been a venture capitalist for two decades. He’s lived and worked through the dotcom bubble and the great recession of 2008.

He noted that a majority of the firm’s time is being spent now with current portfolio companies. But, he said, the firm is open for business and will listen to new pitches. He pointed out how the firm’s 2008 vintage was a backer of IronSource, Outbrain, Payoneer and Redis Labs.

“This is a crisis, but the world will prevail,” Cohen said.

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