AHG Lab, which is said to be the largest independent venture builder in the Philippines, has secured $4 million in Pre-Series A funding which the company will use to fuel its growth, portfolio of ventures and programs, and the wider startup ecosystem.
Rene Cuartero, AHG Lab CEO revealed that “the funds raised will bolster our venture-building efforts by strengthening our operational, strategic, and funding support for our 10+ startups – with more in the pipeline being incubated as we expand to more verticals and geographies.”
“Additionally, the capital will expand our support in founder-focused programs like Founders Launchpad, our ongoing hands-on incubator and accelerator program. Finally, these funds will pave the way for our service organizations, providing crucial operational, finance, compliance, product, tech, and marketing support for Philippine startups, forming an essential part of the startup ecosystem’s backbone,” the executive said.
Cuartero highlighted that these are rooted on AHG Lab’s unique approach as a venture builder which resonated with startups, founders, and investors alike.
AHG Lab said it remains committed to their comprehensive and hands-on founder support, spanning industry-specific strategic advisory up to providing dedicated operational teams to run back-office and tech requirements of portfolio companies.
To date, AHG Lab’s portfolio features diverse ventures with traction in various industries, led by driven founders and leaders. Among these companies are startups that have closed their Angel and Seed rounds showcasing value creation for the venture builder and its investors.
These include Shoppable Business, a B2B wholesale supplier and distributor marketplace showing double-digit growth in revenue; GoGym, a tech-enabled affordable gym business now with 4 locations; DOON, a peer-to-peer car-sharing marketplace; and Founders Launchpad, an incubator aimed at supporting startups and its founders now running its first cohort with 6 promising startups.
The funds raised for an independent venture builder highlights the fact that there is a strong investor interest in the Philippines.
“We’ve tapped an investor base that believes in the potential of the Philippines. They recognize the Philippines’ strong uptrending macros, our mobile-intensive demographic, and with local solutions’ potential for quick expansion due to our English-speaking population,” Cuartero said.
The startup ecosystem in the country is on the upswing post-pandemic. Foxmont Capital Partners and Boston Consulting Group (BCG) recently reported that in 2021 and 2022, local startups raised a record $1 billion of funding in each of those years. It’s an affirmation of how the country has become one of the most attractive markets in Southeast Asia for venture capitalists from all over the world.
But, securing financial capital is just one part of the equation for Filipino entrepreneurs. Despite growing interest and funding in the ecosystem, startups in the Philippines still grapple with challenges in navigating regulatory environments, accessing technology, marketing advice, talent acquisition, legal compliance, and overall business sustainability and competitiveness.
The Asian Development Bank’s May 2023 report on the Philippines’ tech startup ecosystem revealed significant challenges for Filipino founders. Access to capital remains the top concern for 62% of respondents, while 54% identified regulatory requirements as a major obstacle.
The report furthered that incubator and accelerator programs have proven valuable, with 72% benefiting from access to partners and customers and 64% gaining mentoring and technical expertise. However, subsidies, services and community support ranked lowest, at 12% and 18% respectively, among the benefits received from incubators.
It is these key operational challenges faced by startups that AHG Lab will continue to address, enabling ventures in their portfolio to focus on product-market fit, customer pain points, and business stability for scaling.
This was the cornerstone of the company’s fundraising efforts which echoed with investors, recognizing that venture builders who tackle and understand these startup challenges contribute to higher startup growth and success.
AHG Lab’s funding round was backed by a US family office and two Filipino family offices: the Rufino Family and David Leechiu. In addition, VC and investment funds from the US have also participated in the round including Seaborne Capital and Imagine If Partners.
Lastly, a network of Filipino, American, and European angels that have invested in earlier rounds have also participated.
