Straight to IPO: How Philippine tech company Xurpas grew without venture capital

This year marks a significant milestone for Philippine technology company Xurpas: it will hold an initial public offering (IPO).

You’ve probably never heard of the company. But if you’re a mobile user in the Philippines, chances are, you’ve played its casual games, bought its stickers, or subscribed to its horoscopes.

Xurpas is the company that develops the content that telcos Smart Communications, Globe Telecom, and Sun Cellular offer their subscribers. Over the last 13 years, it has grown to become one of the largest in its category in terms of revenue.

And it was able to do so under investors’ radar.

Unlike most tech companies we know today, Xurpus did not take in any venture capital. The IPO is the first time it will raise funds ever – and it will play a big part in its bid to become a dominant player in the region.

From bootstrapping straight to IPO

Founded by entrepreneurs Nix Nolledo, Raymond Racaza, and Fernando Garcia, Xurpas started in 2001, with a minimum paid-up capital of PHP62,500 (US$1,392).

The three set up the company after their stint at iAyala, where they created “enterprise type of solutions” related to mobile phones.

Except for their computers and his father’s small office that they rented for free, Nolledo said they had no physical assets to boast of. All they had was an idea and foresight.

“We thought there was so much fun stuff you could do on your phone and the opportunity was on the consumer side,” Nolledo shared. “There were six million cellphones and two million PCs at the time, and because the cost of the cellphone was lower than the PC, we felt the future would be mobile.”

And they were right. The Philippine mobile phone market has exploded to 110 million subscriptions today.

Nolledo said they never took out a loan or raised capital. They had a conservative approach to their growth: they invested only in products that would give them fast returns. He said it also helped that in their business, “everything is paid for.”

“We were already profitable year one. It’s not like the internet where you spend to host this much traffic, but you only monetize a portion of that traffic,” Nolledo said.