A new startup report has revealed that the local tech startup community is growing at a good pace although it is still lagging behind its counterparts in the Southeast Asian region.
The report was undertaken by Philippine-based venture capital firm Core Capital, which provides early-stage financing for Philippine technology companies. The firm invests through the Gobi-Core Philippines Fund, co-managed with Gobi Partners, a venture capital firm investing in emerging and underserved markets across Asia.
The Gobi-Core Philippine Startup Ecosystem Report 2021 said several external and internal barriers have delayed this growth relative to other Asean countries.
“But with the growing number of investments in the local market, the Philippine startup ecosystem has begun changing for the better,” the report said.
Notable highlights from the report include:
- Prior to 2021, the highest funding stage a Philippine startup reached was Series A. In 2021 alone, the nation witnessed three Series B raises and a Series C just last October. In addition, 2021 funds raised in the first ten months of the year almost exceed the total amount funds raised from 2017 to 2020.
- There has been increasing support from the government through initiatives by DTI, DOST, and DICT such as the Innovative Startup Act, the Startup Grant Fund Program, Startup Venture Fund, and the Startup Research Grant Program, among others.
- The Philippine e-commerce sector was the sector the biggest gainer from pandemic-fueled digitization, and a total of 35 e-commerce startups (including enablers) were founded in 2020 and 2021 alone, during the pandemic.
- E-money accounts skyrocketed by 94% in 2020, following the necessary digitization of financial transactions in light of lockdowns, a sign that fintech startups can continue to expect policymaking and regulatory support to hit BSP’s target to see 70% of the population banked by 2023.
- Gobi-Core’s tracking has revealed that the gender gap between male and female startup founders in the Philippines is now 1:2 – a massive improvement from 1:5 in 2015.
The report noted that there has been a growing number of support from the government, as well as both foreign and local venture capital firms and angel investors through the creation of laws, funds, and incubation programs.
“This increasing investment has led to the emergence of the local technology market with the fortification of the Iron Triangle (consisting of logistics, e-commerce, and fintech sectors) as a result of the Covid-19 pandemic,” it observed.
The report added: “With the Philippine technology market now being solidified in the country’s ecosystem, there is now a clearer direction of how this startup community will continue to progress.
“This includes the country’s new wave of technopreneurs, the preference for camels over unicorns, and the rise of the entertainment and cryptocurrency sectors in this new world. With these opportunities, the Philippine startup ecosystem is only just beginning,” the report said.
