Philippine-based venture capital firm Gobi-Core Philippine Fund has announced the release of its updated “Philippine Startup Ecosystem Report: Founder’s Edition 2023” originally released last November 2023.
The 2023 report begins by underscoring the Philippines’ evolving ecosystem and accelerated digitalization catalyzed by the pandemic, coupled with its substantial English-proficient consumer base, growing population, and increasing governmental initiatives.
These factors, the report said, collectively made the Philippines an attractive market for startup investments and expansion.
However, the report noted there was a discernible downturn in funding compared to 2022, with both deal size and fundraising rounds plummeting by over 70% and 60%, respectively.
Nevertheless, the surge in startup deals by over 53% underscores the resilience and adaptability of Philippine founders, who adeptly extended their runway amidst capital scarcity.
“This shows that the ecosystem has begun learning to build its startup foundations, thereby signaling a maturing startup landscape,” the report said.
These fundamentals involve a shift in focus on founders building or refining their business models to be more sustainable and cost-efficient, rather than solely prioritizing rapid expansion, it added.
“Notably, startups responded to this paradigm shift by raising bridge rounds besides a noticeable increase in grants and early stage investors and enablers funding at pre-MVP or even pre-revenue stages,” it said.
The report observed that while overall fundraising decreased, total deal counts and the increasing number of Seed and Series A staged startups show the ecosystem’s ability to not just survive but thrive amidst changing market dynamics.
“Furthermore, the rise in government support aims to address remaining funding gaps and regulatory hurdles faced by startups to further bolster startup growth,” it said.
“While challenges remain and solutions are still in the early stages of implementation, entrepreneurs remain committed to making their businesses flourish, driven by a collective belief in the Philippines’ potential to build a vibrant startup ecosystem.”
