Philippine-based venture capital firm Gobi-Core Philippine Fund recently unveiled its ‘Philippine Startup Ecosystem Report: Founders Edition 2023’ report, providing an in-depth analysis on the country’s current startup landscape based on insights from a survey conducted with several of the ecosystem’s established founders.
The Gobi-Core Philippine Fund is collaboratively managed by Manila-based venture capital firm Core Capital and Gobi Partners, the interconnected Pan-Asian venture capital firm focusing on emerging and underserved markets across Asia. The fund offers early-stage financing to local start-ups.
The fund’s recent report, which is co-presented by Alibaba Global Initiatives, highlights the nation’s strengths such as its large English-proficient consumer market, increasing digital adoption, passionate founders, and various government initiatives aimed at supporting startups.
The report notes that favorable macroeconomic conditions such as low interest rates boosted inflows of venture capital funding for founders between 2020 and 2022, delivering over US$200 million to the Philippine tech space in 2020 alone. However, a less favorable economic landscape in 2023 means there has been a decline of more than 21% in deal count and a 40% decrease in fundraising from 2022 to the year-to-date (YTD) 2023 alone.
Beyond funding, founders’ awareness of fundraising durations, dictated by operational runways, is a key challenge. The survey also highlights a significant 14-month average for securing pre-series A funding. Concerns about prolonged fundraising are evident, with 57% of founders perceiving a funding deficiency and 74% noting a lack of government support. Regulatory hurdles and the need for a more startup-friendly environment were also emphasized in the report. Finally, educational gaps, unaligned with industry needs, compound the multifaceted challenges faced by Filipino startups.
Yet the report also underlined the firm’s belief that the country deserves and is capable of building a dynamic startup ecosystem.
“The digitally-savvy Filipino consumer, steady remittance inflows protecting the currency, and forecasted uptick in VC between 2025-2030 position the country as home to talented entrepreneurs solving meaningful problems. When solved, these challenges will reward not just the entrepreneurs, but the entire labor market,” said Carlo Chen-Delantar, Founding Partner at Gobi-Core Philippine Fund in an opening statement on the report. “The idea of a “Philippines to the World” – with businesses succeeding regionally – has proven resilient despite the pandemic. This talent-driven regional expansion builds on supportive government initiatives, which we at Gobi-Core observe through co-investing with the Startup Venture Fund, advising the Startup Grant Fund, and partnering with agencies.”
Overall, the report contains extensive advice for ecosystem players including challenges seen operating in the country, the gaps in local infrastructure, as well as the biggest opportunities they see ahead for local startups.
The Gobi-Core Philippine Fund aims to share diverse founder experiences with industry stakeholders, recognizing that the ecosystem thrives on collective problem-solving, impactful contributions, and national pride. The goal is to deepen understanding and effectively support the growth of the Philippine startup ecosystem.