Global consulting firm Boston Consulting Group and Philippine-based venture capital fund Foxmont Capital Partners recently released the 2024 edition of its Philippine Venture Capital Report. The report dives into the current state of the startup economy and VC landscape in the Philippines, including how the Philippines is performing against its regional neighbors, where the country’s startup ecosystem currently stands, and emerging sectors in the landscape.
The report was presented by Foxmont Capital Partners Founding Partner Jelmer David Ikink and Managing Director and Senior Partner and Head of BCG Manila Anthony Oundjian at an exclusive media briefing on Wednesday, March 20 at Menarco Tower in Bonifacio Global City.
The report indicated that the Philippine startups experienced a 16% increase in deal volume for a total of 96 deals in 2023, with the country’s share of regional venture funding growing from 7% to 13% between 2022 and 2023. Filipino startups raised USD 956 million over 2023, experiencing a 14% dip from 2022 but notably better than the 62% year-on-year decline observed by the Global Private Capital Association across Southeast Asia.
The report attributes the country’s deal volume increase to concurrent national economic growth, with the Philippines posting the highest GDP growth among ASEAN countries at 5.6%. Other relevant factors include positive economic and demographic tailwinds, with the country continually supported by growing labor participation and consumer demand as a result of a young population with an average age of 24.
The report also observed a 13% growth in gross market value for the Philippine digital economy in 2023. The report highlights that the Philippines has reached an inflection point in key digital transformation levers, mirroring trends observed in Indonesia, China, and India.
According to Oundjian, “There are many exciting prospects in the Philippine startup ecosystem. As the landscape develops, we expect to see companies providing deeper value propositions as a core part of their customer strategy. This focus on offering more tailored solutions is in line with the evolving needs and preferences of the Filipino consumer, who value engagement, trust, and relationships.”
E-commerce and fintech in particular displayed consistent growth to meet the evolving demands of Filipinos. Though 64% of Filipino consumers prefer to see and touch an item before buying, 50% have still shopped online within the past 12 months. The result is that e-commerce players adopt a model where both tech and non-tech strategies work together: for example, some e-commerce startups have adopted an online-to-offline model where easy online browsing is combined with accessible physical stores for added assurance. Similarly, fintech players have begun increasing verticalization and product expansion to offer tailored customer value propositions, secure new users, create industry-specific solutions, and expand their product ecosystems.
The report even points to emerging sectors such as agritech, considering that the Philippine agricultural budget increased 21% from $2.93 billion to $3.54 billion between 2023 and 2024. Spotlighting the agritech sector aligns perfectly with Foxmont’s investment strategy, which, as Ikink explains, consistently favors tech-enabled startups that excel in driving innovation, efficiency, and scalability.
Ikink notes Foxmont is bullish on the Philippine startup ecosystem for several reasons. “The sustained momentum we see in Philippine startup investments is encouraging, particularly with early-stage deals. We attribute this performance to a deepening pool of strong founders, attractive Philippine macro fundamentals, modest entry valuations, and a reallocation of regional private capital,” he said.
“A lot of the founders and the investors we talked to commonly mentioned that the grit of Philippine founders is really impressive. Founders don’t want to stop here. They’re fully committed,” concluded Ikink. “And that’s a really key ingredient because entrepreneurship is a crazy rollercoaster. That grit is one of the reasons why we’re also so positive about the Philippine startup ecosystem because if you have that, we believe that the ecosystem is poised for continued growth. The fundamentals are there, what we need to do is just continue to continue to invest in those founders and help them through their growth.”
Access the full report here.