The Philippines startup scene is alive

EYES WIDE OPEN – Iris Gonzales of Philippine Star

Over the Lenten Break, you could not have missed Elon Musk’s $43 billion bid for Twitter, the social media superstar with that little blue bird, unless you went off the grid.

Musk’s takeover bid is still a running story as of this writing. It may not happen because shareholders dread the idea of having the not-so-loved Musk as Twitter’s new owner. We’ll have to wait and see what happens, but I’m more interested in what this says about Twitter – the phenomenal success of a startup and how a single great idea, with enough support, can really change the world.

Twitter, for sure, changed the way we communicate and consume news. It started as just a simple side project that emerged from the ashes of another startup, Odeo, a podcasting platform.

In industry parlance, startups are businesses that want to disrupt industries and change the world.

Are Filipino tech entrepreneurs riding the wave? Is the Philippine start-up scene catching up? It seems like it as Philippine startups raised $1.03 billion for funding in 2021, a 179 percent increase from the previous year, according to the Philippine Venture Capital Report 2022.

The report, a joint effort by venture capital fund Foxmont Capital Partners (FCP) and global management consulting firm Boston Consulting Group, said 2021 has been a watershed year for the Philippine startup ecosystem, with total deals hitting a record of 92. (Philippine Star, April 4, 2022).

Fintechs

By sector, fintech startups continued to drive the majority of deal activities in the country last year, representing 77 percent and 65.77 percent of deal value and volume, respectively.

This is good news and I hope it translates to better and more affordable financial services for Filipinos. I am all for fintech because I would like to see Filipino consumers have access to financial services, especially those in the rural areas.

Unfortunately, at present, the cash out fees charged by existing fintechs such as PayMaya and GCash are still on the high side – P15 to P20 per P1,000 the last time I checked. This seems minimal, but for many Filipinos, it’s a lot.

There is still so much room to lower the fees. Which is why it’s good to see more fintech players in the country. Competition is always good for consumers.

Tech startups

I also recently met Nichel Gaba, founder and CEO of Philippine Digital Asset Exchange (PDAX), one of the leading virtual asset providers in the country.

Last February, PDAX raised more than $50 million in a funding round led by US investment firm Tiger Global Management as the cryptocurrency exchange looks to make virtual assets more accessible to more Filipinos. Conglomerate Aboitiz Group took part in the financing round, a testament that indeed, the Philippine start-up scene is alive and going strong.

During our recent chat, Nichel said the funding would be used for working capital requirements, etc, as the Bangko Sentral licensed-PDAX aims to help more Filipinos buy, sell, and trade crypto.

The goal, Nichel said, is to bring more Filipinos into the crypto economy and drive financial inclusion and security through investments.

Ignition

Speaking of PDAX, I learned that Nichel was able to get the help of Ignition, which helps Filipinos succeed in the start-up scene by providing advisory services to the budding Philippine Innovation sector – which still lacks venture capital raising expertise. Ignition also partnered with the Department of Science and Technology to help Filipino scientists become entrepreneurs.

Ignition was founded by Juan Paolo Villonco, a lawyer and an entrepreneur. He is also the fintech policy advisor of the Securities and Exchange Commission (SEC), the corporate regulator, a beat I cover.

In the energy beat, I also encountered Exora Technologies, a tech startup that helps big energy consumers find the best energy supplier through their digital auction platform. Big firms like Converge ICT Solutions, Bounty Farms, LCC Malls, etc. worked with Exora in securing their energy contracts.

These are just some of the startup companies I know, but I am sure there are many others trying to bring their great big idea into the world.

In my past two columns, I tackled the metaverse and play-to-earn games and now, Philippine startups, because on a larger scale, I would like to see the use of technology in the country grow to dizzying heights to create a more inclusive digital economy. We are still so far behind compared to other countries.

I am not a tech evangelist because I don’t know enough about technology yet, but neither am I a cynic. I am well aware that there will always be bad eggs and scams, but I look at technology as something that can improve our lives for the better.

And it should remain as such. Technology, indeed, should change the world for the better and not pull us back; it should advance – and not undermine – democracy; it should make the economy inclusive and not alienate marginalized sectors; it should help us become more informed, and ultimately, help us in this nation of 110 million, reach our full potential.

Retrieved from philstar.com.ph. See the PhilStar article here.