The pandemic has enabled ideas and solutions that we would have never imagined in a world without Covid-19. Mandatory isolation, quarantine, lockdown, curfews or stay at home orders, tracking applications (like Arogya Setu), covid bubbles (in IPL and NBA) and travel bubbles between countries – are some of the new solutions and ideas, we have seen being applied. With the vaccines for covid-19 now in the picture, and as vaccination has begun across the world, there is a new solution being suggested and tested – Vaccine Passports.
What are Vaccine Passports?
It is a certificate that shows the proof of vaccination for an individual, that gives them access to certain facilities, activities, events and travelling. One of the first countries to implement such a mechanism is Israel. Israel uses a “green pass” smartphone application permitting vaccinated individuals’ access to public venues such as gyms, hotels, concerts and other entertainment.
Since some research has now shown that the risk of transmission through a vaccinated person is reduced, the idea behind vaccine passports are to allow economic activity among the vaccinated individuals to begin freely and the activities being expanded as a greater population gets vaccinated.
This is nice, right?
To an extent, yes. The biggest benefactor from the concept of vaccine passports is the hospitality and tourism sectors that have been some of the worst hit due to the pandemic. Restaurants, retail business, travel, entertainment can see an increase in footfall if and when such passports are implemented. This will also help ease restrictions of quarantine, isolation, and lockdowns as vaccination becomes more widespread.
Where is this applicable?
The International Air Transport Association (IATA), which has 290 airline members from 120 countries has come up with a ‘travel pass,’ that will be used to verify testing results and/or vaccine information among governments, airlines, laboratories and travelers to revive international travel. The Washington Post reports that IATA’s Health Pass is being used on a trial basis by Emirates, Qatar Airways, Copa, Malaysia Airlines, Singapore Airlines and other airlines.
The state of New York in the USA is also adopting a vaccine passport called ‘Excelsior Pass,’ a pass that will be accepted at sports, event, arts and entertainment venues.
Similarly, the European Commission is also looking at ‘digital green certificates’ that will soon be ready to be used for travelling across Europe in the summer. This pass will be used for vaccinated individuals as well as a certification for negative tests.
The UK government is said to also be testing the feasibility of such a mechanism in place. But, Prime Minister of the United Kingdom, Boris Johnson acknowledged that vaccine passports raised “complicated ethical and practical issues” and stressed their introduction was not imminent.
What does he mean by that?
The concept of vaccine passport raises critical ethical concerns with scientific and technical challenges in place while splitting the society into – ‘the jabbed and the jabless.’ Here are some of the concerns associated with the idea of vaccine passports.
- There are still questions about the efficacy of the vaccines in reducing the risk of transmission, especially with the new variants propping up;
- The vaccines in many countries are still being supplied to the population that is considered at high risk and is not universally available;
- The supply of vaccines is not enough to create a ‘health-pass’ ecosystem;
- The WHO in a statement said, “introducing a requirement of vaccination as a condition for travel has the potential to hinder equitable global access to a limited vaccine supply” – essentially the access of vaccine to those at risk in poorer sections is hindered;
- Counterfeit passes. Here’s an entire report by the BBC on the vaccine passports being sold on the darknet.
- Inconsistency in requirements for health passes and other rules and regulations around travel, quarantine, vaccinations across different countries make it difficult to implement such an idea.
- Biggest concerns of all – privacy.
“Vaccine passports as checkpoint permits could lead to a widening in the use of, and access to, medical records…If you are unable to be vaccinated, then these companies would be able to demand an explanation, requiring you to provide sensitive information about your health – and if one first opened the door to such a development, there would be a risk of more medical information being added to the vaccine passport.”
This is a quote from a brilliant blog post I found that explores how vaccine passports are a bad idea and is a ‘type of document is associated with authoritarian regimes,’ that the authors argue will move ‘the open and trust-based Norwegian society toward a surveillance and control regime’ – a concern that is not limited to Norway but can be applied everywhere.
Its Unicorn 🦄 Season
Something Out of the Blue
The Indian startup scene has been breaking new ground every year as new companies, innovations, solutions, markets and entrepreneurs join the movement. The past week was one of the craziest weeks with multiple companies going through rounds of funding that have created five new unicorns. Unicorns are those private companies/startups that are valued at $1 billion.
In February 2021, India had 44 unicorns, that according to a Venture Capital Report, generated a value of $106 billion and employ over 1.4 million people annually. Some popular unicorns are – Zerodha, Byjus, PhonePe, Ola, Dream11, PolicyBazaar, Lenskart, Delhivery and Nykaa. India’s most valuable unicorn is PayTM. After United States (139) and China (115), India has the 3rd most number of unicorns with 49 startups attaining unicorn status. Bengaluru keeps its position as the startup capital in India with 41% of the unicorns based out of Bengaluru, followed by 34% in Delhi and 14% in Mumbai.
Out of 49 unicorns, 9 of the companies have turned into unicorns since the start of this year, 5 of which have come in the last one week.
Now, what are the 5 startups that have joined the unicorn club over the last week are:
- CRED valued at $2.2 billion
- Meesho valued at $2.1 billion
- Groww valued at $1 billion
- PharmEasy valued at $1.5 billion
- Gupshup valued at $1.4 billion
Here’s an image I found that will help you understand how Series Funding works. From the 3Fs – Family, Friends, Fools to investment firms like Tiger Global Management.
Tiger hunts Unicorns
A company that has been omnipresent in the series of unicorns that have come up in the last week is Tiger Global Management, a New York-based investment firm that has funded 4 of the startups that turned unicorns.
It is companies like Tiger Global (19), Sequoia Capital (15), Masayoshi Son’s SoftBank (12), that have put faith in the Indian startup ecosystem. Here is an article on inc42 that gives an overview of the unicorns in India.
Worth it or over-hyped?
But the absurd amounts of funding raised and unicorn spree in India has raised a few eyebrows among some questioning the sustainability of some of the businesses that have been given the tag of unicorns. The main target when they talk about this is CRED. In 2020, the much-hyped Kunal Shah’s company CRED spent Rs 727 to earn a rupee back. The company does not post any profits or has a great revenue stream to make it a sustainable business.
I came across this LinkedIn poll that asked the same question about CRED that many seem to be wondering about – ‘Does CRED add any value other than financial discipline?’ CRED seems like a solution to a problem that does not need solving. 67% of the 700+ people who participated in the poll said CRED does not add any additional value than instil financial discipline.
Kunal Shah, founder and CEO of CRED chimed in on this debate by posting on LinkedIn the following:
Another person that chimed in on the series of funding is Zerodha’s founder and CEO, Nithin Kamath, who tweeted, “Right now, is probably the stupidest time for fintech firms like @zerodhaonline to be raising money.” The following is believed to be aimed at one of its competing fintech companies – Groww.
Only time will tell us where this debate will be going and whether some of these startups are just over-hyped and are riding the wave of a high valuation run in the market among investors or whether they will live up to their valuations by becoming profit-making sustainable businesses.
This post is part of the weekly newsletter on economics, finance and public policy – Finanomics by Phani Datta. You have reached the end of the eleventh edition of finanomics, thank you for reading. Please do let me know your thoughts, suggestions, feedback, or comments on the newsletter as well as the content in it. Thank you, happy Sunday! See you next week!