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FREMONT, CA: The present state of the startup industry in the Philippines is achieving new heights, and its tomorrow is only set to get promising.
Investors from Both foreign & local entrepreneurial veterans have been funding business opportunities in the Philippines today. It’s not unusual to hear about successful companies founded in less than a decade and thriving in the country’s economy. But, of course, many talents also want to work in this landscape now, as any experienced hiring manager or recruitment agency would likely say.
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A startup should meet three conditions to be called:
1. A potential to scale.
2. Uses non-traditional business models and emerging tech.
3. Has an intention to solve a social issue.
Some facts about the Philippine startup industry.
1. There are possibly around 500 startups in the Philippines today. Exceeding 300 of them were founded between the years 2012-2017. More companies are about to flourish in 2018-2019.
2. Around 88% of the interviewed founders cite capital requirement as the number one challenge they underwent when they were starting.
3. Under the same survey, 54% mention regulatory requirements and 50% say start economics or business conditions are the second and third most normal hindrances at the beginning of their ventures.
4. Most startups value and require financial backing in the beginning stages of the business. 94% of the startup leaders said they are planning to welcome an investor in the next three years.
5. Lazada is the best startup by revenue. Since 2012, the online shopping platform has continued to perform well and is one of the best resources modern Filipino shoppers look to for an array of products.
6. Many startup founders are “serial entrepreneurs,” and 56% of startup business holders have put up anywhere between 1-2 companies in the past. This also indicates that the same corporations or individuals own most startups because of their existing entrepreneurial knowledge and broad network.
7. Most startups reportedly need $1 million for capital funding and maintenance, but most founders are not comfortable borrowing from banks. Instead, they are more about tapping investors than loan money.
8. The Philippines is a popular destination for startups as entrepreneurs view Southeast Asia as a prime market to tap. The considerable advantage of Filipino workers fluent in English and cheaper labor translates to reduced business costs.
9. Business owners say the obtainable market (39%), the availableness of talent (20%), and low barriers to entrance (16%) are the top three factors that support them build a startup.
10. Survey says the technology, services, and customer experience are the top three areas most startups are about to innovate in the next three years. This is in line with the global switch to customer-centric marketing and the application of developing tech in businesses.
What are the implications for entrepreneurs?
While beginning a business will often have risks, the entrepreneurial shift of millennials and several tech advancements have set the stage for better opportunities and inspiration for others to follow the same path. In addition, many big names in specific industries are startups, such as the online fashion shop Zalora and the ride-sharing app Grab.
Despite the increasing number of startups present, investors and business analysts still point out the infancy of the Philippine startup scene. Hence there’s still plenty of room for potential and growth. But as the country has the second rapidly growing economy in Asia, it’s one of the best places to innovate for rising markets, social enterprises, and tech.
Christopher Star, the Manila chapter title Tech in Asia, intelligently notes that to sincerely survive and thrive, Filipino entrepreneurs must foresee the local lens and think bigger to draw foreign investors and catapult their business concept on a global scale. As a result, there will be many more changes in the next five years where the startup culture will grow and go head-to-head with the outsourcing industry.
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