\Startup Life Analysis/

Virus-struck Italian startups rally to their country’s cause

A lockdown that was originally deemed a nuisance is now seen as a patriotic public duty.

By Ben Munster in Rome

Adamo Dagradi, the communications director of Milan-based online courier service Milkman, is in his pyjamas—partially. 

“My upper part is a little more presentable, because I have to do video calls,” he admits. Like millions of other people in Italy, Dagradi has been toiling from home, complying with a countrywide lockdown designed to help mitigate the spread of the coronavirus outbreak.

His state of half-dress, he says, is for the greater good. 

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The outbreak, which has so far infected upwards of 35,000 people nationally and left nearly 3,000 dead, has emptied out Italy’s streets, crippled businesses reliant on foot traffic and led to millions working remotely. Across the country, “non-essential” high-street businesses have been ordered to close their doors, and the government is preparing to launch eagerly awaited stimulus of €25bn.

Unthinkable barely two weeks ago, the rest of the world is now following suit, with similar restrictions announced in France, the UK, Spain and the United States. As reported by Sifted last week, tech businesses have largely been able to adapt to the sudden civilisational change thanks to their pre-existing smart working culture. (Others have apparently begun to adopt that culture, with the stock prices of video-conferencing platforms like Zoom rocketing up in value as the rest of the market crumbles.) 

Yet, as Italy’s situation has worsened dramatically over the course of a few weeks, with the quarantine intensifying and doctors in the north describing harrowing scenes of wartime triage, companies say they have gone to even greater lengths to protect their clients, employees and, by extension, the wider world.

To almost everyone, a lockdown that was originally deemed a nuisance has taken on the form of patriotic public duty: as Italians witness other countries inching toward Italy’s own fate, they have rallied to help out doctors on the front line, all the while urging other small businesses worldwide to stay indoors.

The scale of the crisis in Italy will likely be mirrored across Europe, the US and the rest of the world in the coming weeks. The reaction among small businesses — both the fear and the patriotism — may be mirrored as well. 

Alms for the quarantined  

Although Federico Sargenti is loath to admit it, his business has been doing swimmingly since the lockdown. He is the chief executive of Supermercato24, an online groceries delivery business resembling Ocado. The company, he says, is straining under the weight of a sudden increase in orders from newly quarantined Italians. While people in the country are not forbidden from going grocery shopping, many would prefer not to: leaving the house risks spreading the virus, or bringing it back in. 

Yet even delivery poses a risk, and Supermercato24 has made an effort to protect everyone involved in the delivery process. Gig economy “shoppers,” who buy groceries on behalf of consumers before delivering them, have been provided free protective masks and gloves, insurance in the event they catch the virus, and in-app features to protect their wellbeing, such as the option to flag a planned delivery as “contactless”: When they deliver a package, they can now just leave it at the door.

The company has also rolled out free delivery to people who cannot leave the house. “This service is actually needed for a segment of population now that can’t get out,” says Sargenti. “We’re working to make the service work for more vulnerable people.”

Milkman, the courier, has offered similar provisions, says communications director Dagradi. The company has urged its drivers—who are professionals, and not gig economy workers—to wear gloves and masks, and has paid to have their vehicles deep-cleaned. It has also relieved buyers of signing received packages.

In a blow to Italy’s cash economy, Milkman has also suspended “pagamento in contrassegno” (cash on delivery) style payments, in order to help tech illiterate customers pay for their orders online without handling potentially contaminated banknotes.

Satispay, a payments company that has raised €415,000 for the Italian civil protections department, is one step ahead in facilitating a truly contactless existence: the company’s product allows people to pay “without coming near to the cashier, not even to the point-of-sale device, thus reducing any kind of contact”. 

Room at the inn

Even businesses that are struggling haven’t let their misfortunes prevent them from assisting in the national effort. Sweetguest, an Airbnb-style home-sharing app, last week reported an 80% nosedive in its bookings, a loss that has since increased by a further 10%. “We went from €1m in revenue to €100,000,” says founder Rocco Lomazzi. Homepal, a rental startup, reported a similar devastation to its business. 

The companies, nevertheless, are doing their bit to help out. Homepal has given free laptops to employees to help ease them into home-working. Sweetguest has let out its rooms freely to people who are unable to leave cities they have been quarantined in, as well as those who have been ordered to self-isolate after testing positive. (Travel startup BizAway did a similar thing, with chief executive Luca Carlucci saying that “the common good should tower over the individual needs”.) Sweetguest, for its part, has also offered free rooms to patients in intensive care, as well as the droves of medical practitioners who have surged into the northern regions. 

Italianway, another rental business, is also taking a hit for Italy’s sake. “We are co-ordinating a huge effort to offer free apartments to doctors and people helping in hospitals,” says Marco Celani, the company’s chief executive. “As of today, we are giving for free about 100 apartments in Milan.”

“We used to say, ‘mal comune mezzo gaudio,” says Lomazzi. The idiom is the Italian equivalent of ‘misery loves company’, but Lomazzi says this is an inadequate response. Instead, people must help each other out, he says, because Italy’s situation will soon be the wider world’s. “It’s not just an Italian problem,” he says. “This is very important to understand.”

While these companies are implementing these measures by choice, the government has also announced plans to requisition Italian private healthcare businesses and hotel spaces, to turn them over to the sick.  

Given this extraordinary response, Lomazzi is alarmed by the lackadaisical approach of certain other countries. (In the UK, many pubs are still packed with revellers, and New York’s mayor was caught going to the gym.) “You have to believe this will happen in other countries,” he says. “In Italy, the health system is pretty good — it’s not getting worse because we were unable to manage it, but because the virus is dangerous. You have to act immediately, and if the government doesn’t intervene, you have to act personally or life will be in danger.”

Awaiting the Stimulus

That’s not to say these companies have abandoned all hope of surviving financially. Sweetguest and Homepal, along with millions of high-street retail businesses countrywide, are awaiting a windfall in the government’s recently signed “Cura Italia” decree, which will unlock a €25bn stimulus for the economy. 

Companies earning under €2m revenue won’t have to pay taxes; €3.3bn will be reserved for laid-off employees; another €10bn will be set aside for workers, including freelancers, who will qualify for a baseline of €600 a month; another €10bn will be reserved for homeowners who can’t make mortgage payments. 

Although the decree covers only €25bn of projected losses — which the government admits likely “won’t be enough” — it is expected to release a further €350bn into the economy, as companies take out loans countrywide to deal with short-term losses. The assumption, says Homepal’s Lacalamita, is that most of the companies will be able to pay back the loans, and only around 10% will default and warrant the government’s coverage. 

Other countries have followed suit, with the French government announcing a €45bn stimulus and the US federal reserve slashing interest rates to near zero, to encourage borrowing and salvage the economy. 

Lomazzi, who believes the global tourism industry will only begin to twitch back to life in September, hopes the stimulus will increase. “It’s really a little investment if you think about all the companies,” he says. “Business has almost stopped all over Italy. So investment needs to go much higher.” 

Through this all, Italians are nonetheless experiencing a patriotic joy forgotten for decades. Doctors are hailed as heroes; Italians of all stripes countrywide have resisted the isolation of quarantine by singing together from their balconies; cities worldwide are saluting the Italian tricolore

“We feel our government really close to us in these days,” says Max Ciociola of MusixMatch, a lyrics translation startup, which has given €300 to its employees to tide them through the lockdown. “I’ve never seen Italians cooperating like this. We’ll make it and definitely we’ll be better after this time.”

“It’s the first time in fifteen years I’ve seen a national pride,” says Andrea Lacalamita, Homepal’s chief executive. “It’s good because [one remembers] that Italy is a fantastic country. It’s the time we are feeling together — more of a collective. It’s the first time people are with the government.” 

Lacalamita has relished the opportunity to serve not just his clients, but his country. “It’s clear that it’s not the usual fact of Italy,” he says. “It’s something extraordinary, or as we say, ‘una tantum’— once in a lifetime.”

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