Filipino startups are confident and optimistic, with plans ranging from conducting initial public offering (IPO) to tapping new markets within and outside the Philippines. To achieve their goals, they want to make their businesses sustainable through improved tax incentives, greater ease in doing business, and better access to capital.
These sum up the findings of the 2017 Philippine Startup Survey, which will be unveiled during Slingshot ASEAN:Startup and Innovation Summit on 20 October 2017 at the Philippine International Convention Center (PICC) in Manila. The survey was conducted by Isla Lipana & Co./PwC Philippines (PwC), the Knowledge Partner for the summit, in partnership with QBO Philippines, the country’s first public-private initiative for startups formed in 2016.
PwC Philippines’ Deals and Corporate Finance Managing Partner Jade Roxas-Divinagracia, explains: “Respondents were asked about their experiences, insights, motivations, plans, and needs. The report also gives a snapshot of the beginnings and the current status of the Philippine startup ecosystem.”
“Through insights gleaned from this report, we hope that the government and private sector can continue to collaborate to support entrepreneurs in turning their ideas into reality,” says Rene “Butch” Meily, President of QBO Philippines and of IdeaSpace Foundation, Inc.
IdeaSpace Foundation, Inc. is one of the founders of QBO Philippines. Its Executive Director, Diane Eustaquio, notes: “The journey though is not going to get any easier as the landscape is VUCA (volatile, uncertain, complex and ambiguous). Let us continue to work on paving the way for Philippine-based technopreneurs and their innovations so that they can prove their impact on creating greater business value and a brighter future.”
Atty. Alexander Cabrera, PwC Philippines’ Chairman and Senior Partner, has nothing but respect for the 106 CEOs and founders who participated in the survey. “I hope that the stories will inspire other startups, investors, corporates, and the government to work together, and build great companies. There is a huge multiplier effect to empowering aspiring entrepreneurs.”
• 35% of the respondents launched their startups in 2016, and 19% launched in 2017.
• 43% are in the pre-revenue phase, while 37% have annual revenues below PHP2m.
• When they were starting their businesses, the top challenges they faced were capital requirements (88%), regulatory requirements (54%), and general economic/business conditions (50%).
• 63% are planning to raise equity financing to finance their growth.
• 47% are planning to raise less than US$1m in the next three to five years, while 27% are planning to raise between US$1m and US$3m. • 94% are planning to welcome an investor in the next three years.
• Primary uses of funds in the next three to five years are product development (39%) and marketing initiatives (29%).
• Strategies for growth in the next three to five years are to improve existing products or services (84%), introduce new products or services (79%), and enter new territories outside the Philippines (61%).
• 63% are planning to conduct an IPO in the next five to seven years.
• 95% are planning to enter new territories in the next five years.
• New markets to tap are other areas in the Philippines (56%), Indonesia (59%), Thailand (57%), Malaysia (55%), and Vietnam (52%).
• To help startups build sustainable businesses, the top focus areas for improvement are tax incentives for startups (59%), ease of doing business (59%), and access to capital (55%).
QBO Philippines co-founder, the Department of Science and Technology, expresses its desire for the startup community to thrive. DOST Secretary Fortunato De La Peña says, “May everyone realize and appreciate the entrepreneurial environment that has been set up especially for those whose agenda includes not only having a robust source of livelihood but also contributing to the country’s development on the overall.”
For his part, Secretary Ramon Lopez of the Department of Trade and Industry, another QBO Philippines co-founder, shares the same sentiment: “We are confident that with the demonstrated capacity of the Filipino in terms of creativity, talent, and hard work to be innovative and entrepreneurial, plus the continued partnership among stakeholders, we can build an inclusive innovation and entrepreneurship ecosystem that can help in the development of MSMEs.”