According to the 2020 Philippine Startup Survey by PricewaterhouseCoopers (PWC), 96% of startup founders predicted that the Philippines will be seeing revenue growth in the following two years. This forecast has been sustained by the fact we are seeing a great deal of investment in the Filipino startup ecosystem.
While the government could have done more to improve the ease of doing business by creating better policies and offering incentives to startups, 65% of the respondents said the real obstacle hurting new businesses was insufficient funding. Now, however, local and foreign investors are pumping money into the country, with 73% saying they plan to do so within the next three years.
Moreover, 37% projected their companies would enter new geographic markets, with a further 44% expecting to be profitable and stable within that time. Fewer founders, at 77%, are currently saying that capital is a problem, representing an 11% drop from the 2017 numbers.
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Recent investments from global companies such as Kohlberg Kravis Roberts & Co. L.P. (KKR) and Tencent Holdings indicate a promising future for tech startups in the Philippines. Investors anticipate that financial technology (fintech), eCommerce, and others will be the booming sectors.
Here are five hot tech startups in various industries that recently raised funds:
Social media platform Kumu unites domestic Filipinos with the diaspora, offering them profitable opportunities through livestreaming and in-app gaming. Users receive virtual gifts, which can be converted into cash, or they can participate in campaigns and contests and win various prizes.
The company has partnerships with foodpanda, ANGKAS, GCash, Presto Kreams, and Alibaba Cloud. It has raised over $100 million USD, with the most recent funding coming from General Atlantic. The money is slated for investment in content for the platform.
Other investors include OpenSpace Ventures, Susquehanna International Group (SIG), Endeavor Catalyst, Foxmont Capital Partners, and Kickstart Ventures.
Cloud restaurant company CloudEats builds next-generation digital brands and presents consumers with affordable, on-demand meals. It operates in-house restaurants and provides cloud kitchens, connecting with online food delivery platforms such as Grab Food to serve customers. Some of its brands include Burger Beast, 24/7 Wings, Chef Carlo’s Country Chicken, Healthy To Go, 24/7 Coffee, Wok With Yap, and Casa Crawford.
Thus far, it has raised $6.6 million USD, with $5 million USD coming from BAce Capital, Gobi Partners, and Vulpes Investment Management Pte Ltd. Other investors include GMA Ventures and Internet Investment Fund (IIF). Its goal is to expand its offerings throughout Southeast Asia.
PDAX (Philippine Digital Asset Exchange)
Cryptocurrency exchange platform PDAX uses technology to empower Filipinos from every background to trade Bitcoin and other digital assets. It is licensed and regulated by the Bangko Sentral ng Pilipinas. The website has intuitive and user-friendly features for trading a wide variety of crypto coins available on the market.
In August, the company raised $12.5 million USD from an unnamed UK-based venture capital firm to aid their expansion plans and boost their platform. The new investment brought its total funding amount to $13.6 million USD. Other investors include BEENEXT, Ripple, BC Group, UBX Philippines, 100x Ventures, CMT Digital Ventures, and ConsenSys Ventures.
Digital financial solutions provider Mynt offers loans, business resources, payment options, and other services to its customers. It operates mobile micropayment service GCash and online lending company Fuse. These brands enable Filipinos to transact securely through virtual wallets, and to borrow money, respectively.
Recently, Mynt achieved “double-unicorn” status–a $2 billion USD valuation-after raising $300 million USD from global investment giant Warburg Pincus, as well as Amplo, Bow Wave Capital, Insight Partners, and Itai Tsiddon. The company plans to use the money to enhance its market leadership position and continue disrupting the Philippine financial services sector.
Gaming and eSports startup Mineski Global delivers exclusive games, platforms, and potential rewards to users. Its goal is to gamify the world and encourage people to start playing online. It provides support for launching, scaling, managing, and developing gaming platforms.
In September, the company netted $10.6 million USD in Series A funding from Endeavor Catalyst and Exacta Capital Partners. The investment will help them increase the number of customers to over 120 million. It has partnerships with Coca Cola, Razor, Disney, ASUS, Vivo, and Nimo TV.
In addition to slowly-improving investment and policymaking efforts from the government, Justin Cornelius Hall, partner at Golden Gate Ventures, believes tech startups in the Philippines would benefit from increased mentorship and support from institutional and angel investors. Another challenge is finding viable or investable startups that can contribute to the ecosystem.
The new funding from investors targeting the Filipino market demonstrates their belief in the country’s potential. Startups will do well to team up with other brands in their niche to address the overall needs of their customers. This approach should provide long-term benefits to nascent companies.