The Philippine Startup Ecosystem Report: Founder’s Edition

March 13, 2024

Notice: This report has been updated with a newer version dated 13 March 2024.

This period heralds a new chapter for the Philippines, one that demands collaborative efforts and adherence to stringent global standards. In doing so, the nation aims to solidify its status as a key player in the regional market. Now, more than ever, it is crucial for all stakeholders to work together in fostering an ecosystem where innovation not only survives but thrives.

Since 2018, the Gobi-Core Philippine Fund has been a steadfast participant in this evolving landscape, and our optimism for the Philippines' position in the global market remains unwavering. We are resolutely committed to sustaining this vision, working hand-in-hand with our partners, founders, and stakeholders to ensure that the Philippine startup ecosystem is not just surviving but flourishing — a true mark of Filipino resilience. Our collective efforts are geared towards showcasing the Philippines as a vibrant and dynamic market, full of potential and ready to make its mark on the global stage.

Philippine-based venture capital firm, Gobi-Core Philippine Fund announces the release of its updated Philippine Startup Ecosystem Report: Founder’s Edition 2023 originally released last November 2023.

The report showcases Gobi-Core’s ongoing dedication to comprehensively and accurately portraying the developing narrative of the Philippine technology scene as a rising player in the regional startup landscape. Co-sponsored by Alibaba Global Initiatives, this report offers a detailed examination of the Philippine startup ecosystem by 1) drawing insights from the ecosystem’s top and rising founders, and 2) collating research from databases (e.g. PitchBook and CB Insights), company press releases, media publications (e.g. Tech in Asia, Independent Investor, DealStreet Asia) and 3) Gobi-Core’s internal data to provide a thorough analysis.

The 2023 report begins by underscoring the Philippines' evolving ecosystem and accelerated digitalisation catalysed by the pandemic, coupled with its substantial English-proficient consumer base, growing population, and increasing governmental initiatives. These factors collectively made the Philippines an attractive market for startup investments and expansion.

However, there was a discernible downturn in funding compared to 2022, with both deal size and fundraising rounds plummeting by over 70% and 60%, respectively. Nevertheless, the surge in startup deals by over 53% underscores the resilience and adaptability of Philippine founders, who adeptly extended their runway amidst capital scarcity.

This shows that the ecosystem has begun learning to build its startup foundations, thereby signaling a maturing startup landscape. These fundamentals involve a shift in focus on founders building or refining their business models to be more sustainable and cost-efficient, rather than solely prioritising rapid expansion. Notably, startups responded to this paradigm shift by raising bridge rounds besides a noticeable increase in grants and early stage investors and enablers funding at pre-MVP or even pre-revenue stages.

While overall fundraising decreased, total deal counts and the increasing number of Seed and Series A staged startups show the ecosystem’s ability to not just survive but thrive amidst changing market dynamics. Furthermore, the rise in government support aims to address remaining funding gaps and regulatory hurdles faced by startups to further bolster startup growth.

While challenges remain and solutions are still in the early stages of implementation, entrepreneurs remain committed to making their businesses flourish, driven by a collective belief in the Philippines' potential to build a vibrant startup ecosystem. As the country transitions to this post-pandemic economy, Gobi-Core aims to have this report be a continued benchmark and guidance for investors, startup enablers, academic institutions, government departments, and future founders alike to further bolster the Philippine startup ecosystem as the next wave of Southeast Asian startup success.