Filipino firms raised more funds in 2021 than in past 3 years combined

Investments into Filipino startups seem to be picking up this year, as the Gobi-Core Philippine Startup Ecosystem Report 2021 shows that the country is attracting more capital in 2021 so far compared to the past three years combined.

Put out by the Gobi-Core PH Fund, a joint venture between Gobi Partners and Core Capital, the report noted that 2021 presents a “golden opportunity” to invest in the country’s tech ecosystem.

Image credit: Gobi-Core Philippines Startup Ecosystem Report 2021

Many investors have already taken notice, with 2021 recording a total of US$858 million in investments into startups based in the Philippines. That’s more than the total of US$803 million in investments that the country’s startups saw from 2018 to 2020.

The increase in investments is partly due to the country’s booming internet economy, which is projected to reach US$40 billion in value by 2025 to become the fastest growing digital economy in Southeast Asia, Google, as noted in the e-Conomy SEA 2021 report by Google, Temasek, and Bain & Company.

However, the Gobi-Core report noted that gross merchandise value per capita in the Philippines remains low compared to its neighboring countries, which may result in relatively lower volume or value of transactions.

“We believe that while a lot of Filipinos are now online, many are not yet purchasing goods and services through it,” the report read. “Nonetheless, this does present a golden opportunity for technopreneurs to foster talents and expand on to Tier 2 cities and beyond, which will require ongoing government initiatives and domestic investment, which […] is already happening.”

Another factor that can woo investors into the Philippines is the strong support and initiatives from its government and startup ecosystem as a whole. This includes the creation of laws and funds as well as incubation and development programs for startups.

This support has also paved the way for the establishment of Sinigang Valley, which aims to be the first true startup tech hub in the country. The initiative, which began with the founders of Filipino streaming app Kumu, provides housing, retail, and office spaces for emerging enterprises.

Image credit: Gobi-Core Philippines Startup Ecosystem Report 2021

The report also noted the top investments into Philippine startups in 2021, which includes Mynt’s US$300 million round and PayMaya’s US$167 million haul. Gobi-Core added that this year’s investments will be followed by a consistent flow of capital in the coming year.

“Gobi-Core expects funds raised into Philippine startups to reach US$2 billion over the next three years, more than the total amount raised in the last five years. To this extent, we see an emerging trend of independent startups taking a larger share of total funding as these founder-led companies find market fit, solve real world problems, and catch investors’ attention,” the report said.

The full report can be accessed here.