Philippine-based venture capital firm Gobi-Core Philippine Fund recently released an updated version of its “Philippine Startup Ecosystem Report: Founder’s Edition 2023” report, originally published in November 2023. The report underscores Gobi-Core’s ongoing commitment to accurately portraying the Philippine technology landscape, positioning it as a burgeoning player in Southeast Asia’s startup arena.
Founded in 2018, the Gobi-Core Philippine Fund is a joint endeavor between Core Capital, a Manila-based venture capital firm, and Gobi Partners, a Pan-Asian venture capital firm dedicated to emerging and underserved markets across Asia.
Co-sponsored by Alibaba Global Initiatives, Gobi-Core Philippine Fund’s updated report offers a comprehensive examination of the Philippine startup ecosystem by leveraging insights from both established and emerging founders. Additionally, it creates a detailed analysis using data from various sources including PitchBook, CB Insights, company press releases, and media publications such as Tech in Asia, The Independent Investor, and DealStreet Asia, along with Gobi-Core’s proprietary internal data.
The report highlights a decline in startup funding compared to 2022, with both deal size and fundraising rounds plummeting by over 70% and 60% respectively. However, amidst this downturn, there was an increase in the number of startup deals by over 53%, with Filipino founders adept at extending their runway amidst capital scarcity.
The report underscores the Philippines’ allure for startup investments and expansion, citing its dynamic ecosystem and accelerated digitalization fueled by the pandemic. Factors such as a significant English-proficient consumer base, a burgeoning population, and heightened governmental initiatives contribute to its attractiveness.
Additionally, the report maintains that the Philippine startup ecosystem is now shifting towards building strong foundations, indicating its maturation. Founders are now prioritizing sustainable and cost-efficient business models over rapid expansion. This shift is reflected in startups raising bridge rounds, along with an uptick in grants and early-stage investor funding, even at pre-MVP or pre-revenue stages.
Additional data presented in the report reveals the allocation of startup funding, indicating that the finance and e-commerce sectors each garnered 22.2% of total funding. Despite strong e-commerce potential, however, a huge opportunity remains in the market with only 23% of startups going B2C.
The report also highlighted government organizations as a key source of funding, with agencies such as the Department of Trade and Industry, the National Development Company, and the Department Of Information And Communications Technology providing startups with $11.4 million in funding as of 2023.
Alongside upcoming initiatives such as its 12-month “GUIDE Founders’ Programme: From Zero to One” program meant to guide founder development, Gobi-Core Philippine Fund notes its updated report should be used as a guide to help bolster the Philippine startup ecosystem.
Access the full report here.