On May 2, 2021, nearly a year ago, a story went live across social media platforms calling for promising Filipino founders with bold ideas. The article featured five friends, all operations executives working across some of the leading tech companies in Southeast Asia, and their thesis as new investors. With just enough runway and a lot of expert guidance, local startups can set themselves up for massive success—they said. The story went up, and George Padin, one of the featured five, couldn’t help but laugh.
“The thumbnail looked like a One Direction poster—just these five boys,” Padin said. “But people started reaching out. And we quickly realized that these were solid startup founders reaching out.”
Buko Ventures is an angel fund managed by Carlos Otermin Barrera, COO of Lazada Philippines; Angel Ramiro, head of LazMall at Lazada Philippines; Andrew Koger, founder and CEO of Goodwork.ph, the Philippines’ leading marketplace for home and beauty services; Saul Molla Cuesta, former CFO of Lazada and founder of FlowerStore, one of Southeast Asia’s largest gifting companies; and George Padin, CEO of Abstract Digital, an award-winning tech firm that’s built minimum viable products (MVP) for unicorn companies in and beyond Southeast Asia.
Padin recounts how Buko Ventures began as a shared initiative among his friends to see how they might pool together their expertise, their networks, and a little bit of capital, to support raw entrepreneurs in the Philippines. For the most part, the group only writes checks up to $10,000, focusing on pre-seed ventures in need of six months and a shot to figure out if their business opportunities are real or not.
“When we started Buko Ventures, it was purely from an operator perspective,” Padin said. “We were out having coffee together and were talking about how Indonesia has only a little more than twice the population of the Philippines, but has a hundred times better technology. The trends we see in the Philippines today are the ones we saw in Indonesia three years ago. So it’s inevitable, this is going to be a very big market, and we wanted to be a part of it foundationally.”
“Where we saw a really big gap was in helping these really talented founders get just a little bit of runway—about four to six months,” he said. “They quit their jobs and they have four to six months to figure out a solid MVP. If we feel that conviction that we could really mentor them, we help them build their products. We’re those kinds of operators. We do our best to polish founders, and the ones that turn out well, we pass on to our networks for more serious fundraising. I feel that in the ecosystem, we are among the first-movers, making that first touch.”
Shortly after that first story went live, the team began getting pitches. Juggling their new roles managing this angel fund with their day jobs as top tech executives, the Buko team entered a feverish period of late night Zoom calls and constant coordination across countless group chats. “There are still nights we’re all on a call like Shark Tank, listening to pitches at 9PM, and we all look like zombies,” Padin said.
In addition to startup pitches, the team was also getting commitments from other local tech executives to contribute to their fund. Eventually, their global networks began chipping in. By the end of 2021, Buko Ventures’ Fund I had 14 investments in its portfolio. These ventures would go on to raise an additional $5 million before year-end, seeing a 10x increase in value across the portfolio in less than a year. Other metrics the group is proud to share are that 13 out of their 14 founding teams are Filipino, and almost half of them are female-led ventures.
Among these investees are medical procurement platform InterLeukin and digital rental marketplace Forent.
Padin defines success for Buko Ventures as seeing their founders graduate from the angel fund’s “borders of responsibility”. Should they eventually move from raising Seed and Series A rounds, to eventually raising a Series B, he says the team might explore divesting a little. But for now, at least on paper, he says the returns are looking really good.
One of the first investments Buko Ventures made, campus gaming startup AcadArena, was a major driving force behind the fund’s early success. Following a pre-seed investment in July 2021, AcadArena successfully raised a $3.5 million seed round in December, led by Europe’s premier blockchain fund for early-stage crypto 1KX, with participants including Hashed, a global early-stage venture fund for blockchain and crypto pioneers, and Kevin Lin, co-founder of live-streaming giant Twitch.
While the fund is just shy of a year old, checks from Buko Ventures have quickly grown into seals of approval for larger investors on the hunt for promising startups. “When we started Buko, we were constantly in talks with groups like Wavemaker and Foxmont,” Padin said. “They would look to us like, ‘hey are there interesting founders that you’ve interacted with that we could potentially explore and lead a round with?’ So we’re seeing those patterns of us becoming a stamp of approval of sorts. Like, hey, this startup is Buko-approved.”
According to Padin, that’s due primarily to their core team’s approach to investing. “When we engage with startups, what we actually do is say ‘hey, take our $10,000 and place that into a valuation that you feel is fair—but we want to take 2% advisory shares. We’ll have a WhatsApp chat, we can do bi-weekly calls.’”
By coming in at what they refer to as the riskiest stage—pre-revenue (sometimes even pre-launch)—Buko Ventures champions entrepreneurs with raw potential more than anything else. Then, they de-risk the ventures, by providing guidance, product support, and access to the team’s vast regional network.
For more mature startups that the team decides may not need as much guidance, Padin says they don’t always take on formal advisory roles. But recently, that’s exactly what startups have begun looking for in a Buko Ventures investment. “We’re starting to see this trend of startups who have already raised funding and gained traction looking to have us come in as operator-advisors,” Padin said. “They let us in, we give insights, and we do some publicities around it so they can tap our networks and close their Series A or Pre-Series A.”
It’s not just six months of runway the team provides, but long-term support in the form of an active support community, led by the five advisors themselves. “So far we’ve invested in sixteen or eighteen startups,” Padin said. “We have a group chat among all the founders and it’s really lively—all these guys helping each other. It feels like a little community.”
Despite their early success and a number of their investees already eyeing foreign markets for expansion, Padin says that Buko Ventures will continue to focus on the Philippines moving into the future. “We see a lot of potential here. There are so many talented Filipinos. And it’s very easy to launch a startup here as an initial market before going regional.”
And as more local and regional players begin to look to the Philippines as fertile grounds for innovative business, paving the way for milestone Series B and C rounds, Buko Ventures is sticking to the pre-seed. “It wouldn’t be too hard for us to make a second fund. We know who to tap and can quickly raise a couple million dollars for a Fund II. Either way, we don’t want to venture into the seed category or Series A category. There are enough big boys playing that game already. We’re staying true to our original mission of being the most helpful early investors for these founders.”