1、31PHILIPPINEVENTURECAPITALREPORT 2023TABLE OF CONTENTSTABLE OF CONTENTSTHE PHILIPPINE INVESTMENT LANDSCAPEPHILIPPINE 2022 DEAL ACTIVITYEMERGING TRENDS AND THEMESDEVELOPMENTS IN THE PHILIPPINESTHE PHILIPPINE STARTUP ECOSYSTEM THROUGH THE EYES OF FOXMONTTHE PROGRESSION OF IMPACT INVESTINGTHE GROWING D

2、EPTH AND BREADTH OF PHILIPPINE FOUNDERS HIGH RATES OF DIGITAL PENETRATION DESPITE A RAPIDLY INCREASING POPULATIONMEDIAN AGE PhilippinesGlobalMalaysiaIndonesiaVietnamThailandSingaporeChinaHong Kong253030293239424538Source:World Economics The Philippine population has consistently ranked th

3、e lowest in median age across the region.The government continues its efforts to promote sustainable population growth through various policies such as the Responsible Parenthood and Reproductive Health Act of 2012,and the Philippine Population Management Program.The government also continues to cra

4、ft economic policies such as the Philippine Development Plan to improve poverty and unemployment rates.Between 1985 and 2018,poverty rates declined by two-thirds.106.7in millions108109.6111113+1.02%On average,the PH population increases by over 1M per year202020022PHILIPPINES POPULATIONSo

5、urce:Worldometer NUMBER OF INTERNET USERS AND INTERNET PENETRATION RATESFilipinos use social media to source purchases more than most neighboring countries.Internet penetration rates have increased by 5%in the last 3 years alone.The Philippines has a 12%higher internet penetration rate than the glob

6、al average.INTERNET USERSINTERNET USERSGLOBALGLOBALINTERNET USERSINTERNET USERS80.7 M85.1 M77.4 M20202021202270%72%75%63%Facebook remains to be the most popular social media app in the Philippines since its debut in 2004.MOST USED SOCIAL MEDIA APPSIN THE PHILIPPINES96.294.475.767.959.2%FacebookFaceb

7、ookMessengerInstagramTiktokTwitterThe Philippines is 2nd in the world and 1st in Asia for most time spent on the internet.AVERAGE TIME ON THE INTERNETusers aged 16-64PhilippinesTIMEGlobal10 Hrs7 Hrs 27Mins28%34%41%48%50%SingaporeVietnamMalaysiaPhilippinesIndonesia%of users that use social media to s

8、ource purchasesSOCIAL MEDIA PURCHASESTHE PHILIPPINE INVESTMENT LANDSCAPE The Philippines exceeds the global average by 99 minutes-almost 2x the global average.AVERAGE TIME ON SOCIAL MEDIAusers aged 16-64PhilippinesTIMEGlobal4hrs 6mins2hrs 27minsSource:DOH(Department of Health),NEDA(National Economic

9、 and Development Authority),The World Bank Source:Statista,DataReportalSource:PNA(Philippine News Agency)Source:DataReportalSource:DataReportalSource:DataReportal1E-COMMERCE AND MOBILE APPS A BOOMING DIGITAL ECONOMY relative to Internet Users,aged 16-6465%93%98.5%98.8%20022%OF SMARTPHONE

10、DEVICE OWNERSThe percent of smartphone device owners in the Philippines is higher than the January 2023 global average of 95.9%.Source:DataReportal,MeltwaterVALUE OF E-COMMERCE MARKETANNUAL REVENUE OF FOOD DELIVERYPost-pandemic,the Philippine digital economy remains robust with a continuously increa

11、sing e-commerce market value that has seen a 33%increase in contribution to the overall digital economy in the last 3 years.As the economy began to open up post-covid,annual Revenue in 2022 shrunk by 3x vs numbers in 2021.DRIVERS OF SMARTPHONE GROWTHCheaper brands such as Oppo and Vivo have seen an

12、increase in domestic popularity.Smartphones became main medium to disseminate information within communities during the pandemic.New telecommunication players enter the field with technologies to improve 4G and 5G speed and accessibility.Diverse and affordable internet plan options(e.g.postpaid,prep

13、aid,unlimited)are now available through mobile devices and accessibility.Almost 12M new smartphone users in 4 years-a 20%increase,equivalent to Indonesia where population is double.SMARTPHONE USERS63.6in millions68.472.174.175.320202002275.42022IndonesiaSource:Statista,Insider Intelligenc

14、eDuring the pandemic,Philippine shoppers had increased their number of purchases by 57%the biggest increase in Southeast Asia.During quarantine,98.8%of all internet users searched for goods and services to purchase.In 2022,the Philippines ranked 1st worldwide in terms of average revenue on e-commerc

15、e goods when normalized for GDP per capita,coming in at 10.54%of GDP/capita against the global averageof6.51%.Among online shoppers aged 16-64,the follow are the biggest online purchase drivers:1Free Delivery3Coupons and Discounts 5Simple Online Checkout 2CustomerReviews 4Cash-on-Delivery Option Fre

16、e delivery and discounts are a great marketing tool to increase chance of purchase.Contribution to GDPValue of E-Commerce MarketContribution to GMV of entire digital economy$3B 0.8%38%75%70%3%4%$12B$14B 202020212022in billions(USD)Source:Meltwater,BusinessWorld,International Trade Administration,Phi

17、lStar Global,DataReportal Source:e-Conomy SEA Report 2022Source:DataReportal2PH CONSUMER ELECTRONICS REVENUEHigh YoY growth from 2017 to 2022 in millions(USD)3384797659871,20212022Source:StatistaOF THE PHILIPPINES997M US$1.6B US$326M US$202020192021DIGITAL FINANCENUMBER OF MOBI

18、LE APPS DOWNLOADED THROUGHOUT 2022 IN SEAPer CapitaPer Smartphone UserPhilippinesVietnamIndonesia2539334727407.04BTotal:YoY:3.23B3.01B+5%+4%+8%While Indonesia ranks first in total number of mobile app downloads in SEA,the number of app downloads per capita and per smartphone user in the PH is at par

19、 with Indonesia.Indonesia,Vietnam,PhilippinesTOP3ELECTRONIC BANKING TRANSACTIONSTotal electronic banking transactions in 2022 were equivalent to three times the GDP of the Philippines in 2021.in billions(USD)1,33020201920212022TOP APPS BASED ON AVERAGE ACTIVE DAYS OF USE IN A MONTHFun fac

20、t:King James Bible ranked 9th at 12 days.2422191615FacebookFacebookMessengerYoutubeTiktokMobile Legends:Bang BangAPPS WITH HIGHEST 2022 REVENUETop 4 apps are all gaming apps PH-based apps VivaMax came in at#6 and Kumu at#11.14.39.98.84.84.6RobloxClash of ClansTiktokMobile Legends:Bang BangCall of Du

21、ty:Mobilein millions(USD)Source:data.aiSource:data.aiPH ANNUAL CONSUMER SPEND ON MOBILE APPS AND IN-APP PURCHASES202020212022238M USD308M USD308M USDDespite macroeconomic conditions,the Philippines did not see a drop in mobile app consumer spend.Source:data.ai28.6B USDMobile wallet transactions in 2

22、022:almost 2x that of 2020The Philippines has one of the highest mobile wallet transactions in Southeast Asia,next to Indonesia and Thailand.4,479,53240,517,8728,174,4975,233,652MONTHLY ACTIVE USERS PER MOBILE WALLETCoins.phGCashMayaPayPalWhile 24%of the PH population is banked in 2022,36%of Filipin

23、os are active Gcash users.DIGITAL PAYMENTS TRANSACTION VALUE VS GDP IN 2022The Philippines ranks the highest among its SEA neighbors,however there still is upside potential for digital payments when compared to the global percentage of 8.36%and China at 19.09%.In terms of Digital Payments ARPU vs GD

24、P per capita,the Philippines fared well in 2022,coming in 2nd worldwide with a percentage of 16.73%,and higher than the global percentage of 15.23%.8.36%GlobalPhilippinesIndonesiaThailandVietnamMalaysiaSingapore7.11%5.59%5.45%4.96%4.49%4.05%Source:e-Conomy SEA Report 2022,Statista Source:data.aiSour

25、ce:data.aiSource:StatistaSource:MeltwaterSource:StatistaSource:data.ai3TOP 4 VIDEO STREAMING PLATFORMSIN THE PH1Vivamax2Youtube3HBO GO Asia4KumuDEVELOPMENT OF DIGITAL INFRASTRUCTUREPROGRESSION OF THE STARTUP ECOSYSTEMAverage Download Speed of Cellular Mobile Connections(Mbps)Average Download Speed o

26、f Fixed Broadband(Mbps)Global Ranking176th92nd114th62nd96th83rd65th63rd61st200002222.43.637.4412.3514.0114.5116.0642.2257.614.347.9114.4217.6218.626.1882.61115.2256thThere has been a drastic improvement in internet speeds for both mobile connections and fixed broadba

27、nd over the past decade,with the PH global ranking jumping 115 spots from 176th to 61st for mobile connectivity and 36 spots from 92nd to 56th for fixed broadband.IndonesiaPhilippinesPhilippine startup activity has increased in line with Indonesia.NEW BUSINESS REGISTRATION PER 1,000 PEOPLE200920160.

28、200.190.340.33The Philippines ranked 59th globally on the Global Innovation Index by the World Intellectual Property Organization,scoring best on the innovation pillars of Business sophistication(ranked 39th worldwide)and Knowledge and Technology output(ranked 41st worldwide).According to the report

29、,the Philippines innovation performance is above expectations given our level of development(lower middle-income).The Philippines is one of the fastest innovation catch-up-to-date among middle-income countries.Within the region,the Philippines is one of the countries that have made the greatest adva

30、ncements in the past decade,moving up by more than 20 slots.In 2022,the presence of strong provincial-based startups became more visible and Foxmont invested in its first two provincial based startups:A digital ledger and point-of-sales app from Catbalogan,SamarA D2C beauty brand from PampangaSource

31、:Global Innovation Index Report 2022 Source:Ookla Speedtest Annual Reports 2013-2022,Foxmont analysisSource:World Bank4DITO receives permit as 3rd telcoWarburg Pincus invests in Converge ICTConverge ICT IPOEntry of DITO as new telco provider100%foreign ownership in telcos now allowed Record US$6B CA

32、PEX by(and permits granted to)three major telcos A strong startup ecosystem requires entrepreneurial spirit and local market understanding.And Im glad to say that we are seeing much more of this now.We now see more founding teams who have seen and been involved with scaling a business,and the unders

33、tanding that it is not enough to just copy successful models from other markets without considering local context and culture.We now have more discussions with local entrepreneurs who have better insights of the local market and its unique challenges,which can give them an advantage.Sure you can lea

34、rn from a similar business from another market,but we believe that understanding the local nuances is the key for local startups to succeed and thrive.Compared to when Patamar made our first investment in the Philippines 5 years ago,the funding ecosystem has come a long way.Today,the funding stack i

35、s more mature and developed,with a greater WHY INVEST NOW:Venture Perspectives If theres one thing weve learned in the years spent investing in startups:its to never underestimate the importance of timing.Weve seen some wonderful ideasand business concepts fail,not because they were inherently bad,b

36、ut simply because it was not yet the right time for them to launch.The market they wanted to serve wasnt ready to avail of their product or service in the way that they were offering it.This was how it was with many of the B2C startups we saw at Kickstart Ventures from 2012 to 2018:so much so that w

37、e occasionally referred to B2C in the Philippines as“The Road to Tears”to founders and investors wed meet.Nevertheless,while the majority of our deals from 2016 to 2019 were in the B2B space,e.g.Sprout,Aiah and Spiralytics,we did find some early success investing in Coins.ph,an upstart mobile wallet

38、 that was acquired by Gojek in 2019.It was around 2019 when we felt the industry start to turn the corner,when the investments of tech giants like Alibaba,Tencent,Grab,and Sea into consumer apps like Lazada,GCash,Grab,and Shopee began to bear fruit.Consumer habits started to shift to digital in a me

39、aningful way,as our local payments and logistics infrastructure grew in scale and maturity.Some of the Philippines most iconic B2C startups were founded around this time:Kumu and Edamama,among several others.5 This simmering demand came to a boil in 2020,as harsh COVID lockdowns forced Filipino cons

40、umers online in a massive way:our digital economy doubled from$8B to$16B from 2019 to 2021,and is projected to grow to$35B by 2025.Finally,the Filipino digital consumer has arrived.Were very excited for whats next for the ecosystem,as there is still so much opportunity for innovation and growth.For

41、2023 and beyond,were keen to find and support solutions to large and persistent problems such as food(in)security,climate change,resource inequality,and mobility,among others.For the Philippines in particular,were fascinated by O2O models merging the frictionless and data-driven world of digital wit

42、h physical assets and infrastructure,to improve the consumer experience and overall efficiency.As one of the earliest VC investors in the country,its been great to see how the ecosystem has developed:were happy to see more startups,VCs,incubators and accelerators helmed by passionate tech leaders th

43、at draw from years of experience to build up the next generation.This virtuous cycle has been building over the past decade,and continues to accelerate.We believe there has never been a better time to be part of the Philippine startup ecosystem.number of active investors,particularly at the early st

44、age.The fact that more of these investors are local is crucial because we believe they have a deeper insight into the market and are better able to identify the most promising startups and founders.In addition,there have been some notable success stories of startups raising growth rounds from region

45、al investors,indicating confidence in their future growth potential.However,there is still a lot of room for improvement.In order for the ecosystem to continue to thrive,it will be important to see more companies graduating to the next level and attracting the funding they need to grow and succeed.T

46、his will be key to ensuring the continued success and vibrancy of the Philippine startup ecosystem.PHILIPPINE 2022 DEAL ACTIVITYDEALS BY INVESTMENT VALUEUS$1M SARI-SARI STORES IN THE PHILIPPINES WHO ARE:Key part of local neighborhoods,as an access point to necessities and basic goodsImportant social

47、 location for Filipinos as a meet-up point in both rural and urban areasHas historically been a distribution point for offline goods(consumer food,prepaid load),saving consumers transportation and timeNo scale to negotiate with wholesalersInsufficient customer insighting and outreachHighly manual,in

48、efficient processesInability to take risks,or invest in businessKEY PAIN POINTSSari-sari stores are an integral part of the economy,being the most ubiquitous distribution channel for common goods,but has historically been neglected and underserved.SARI-SARI STORES AS PLATFORMS FOR DIGITAL SERVICESSA

49、RI-SARISTOREICE 4SALELOAD HERE!Source:Kantar,BCG Analysis 12Telco loadBills paymentGaming E-PinsCash-in for E-WalletsFinances:Remittance HubGoods:E-Commerce HubBECOMING PICK-UP POINT HUBS FOR E-COMMERCE AND REMITTANCESINCREASING RELEVANCE IN THE DIGITAL PAYMENTS SPACESari-sari stores are becoming an

50、 increasingly important channel for a conducting a wider variety of transactions GROWING SHARE OF FMCG TRANSACTIONS 41%of fast-moving consumer goods(FMCG)purchases in 2022 were made in neighborhood sari-sari store(6%higher vs 2020)0-5%processing fees10-20%1of consumer research budget0-5%MDR40-50%APR

51、B2B commerceSecure inventory at more competitive ratesCustomer analyticsInsights on customers to sell more productsPayment solutionsLeverage digital payment solutionsMerchant financingFinancing scale up sari-sari store businessB2B e-commerce platform connecting brands with MSMEs by aggregating deman

52、dB2B digital trading platform enabling SMEs to sell across India with logistics and payments supportSmart POS system that digitalizes the records of MSMEsB2B2C e-commerce platform providing brands with ability to sell to consumers through retail storesB2B e-commerce platform providing credit and inv

53、entory distribution to small retailersB2B e-commerce platform that digitizes the B2B buying process between wholesalers with retailersKEY PAIN POINTSFINANCEOPERATIONSNo scale to negotiate with wholesalersInsufficient customer insighting and outreachHighly manual,inefficient processesInability to tak

54、e risks,or invest in businessPOTENTIAL SOLUTIONSESTIMATED TAKE RATESEXAMPLES ECOSYSTEM PLAYERSPlanned/predictedCurrent PresenceSeveral digital players regionally have entered to capture the emerging opportunities in this spaceIn the Philippines,we see four major value pockets which solve for key nee

55、ds of these competitorsB2B e-commerce platform providing rural stores with distribution and digital payment channelsB2B end-to-end e-commerce platform to digitalize sari-sari stores1234Largest value pocket but need lending and risk capabilities to unlock1.30-40%is spend on market data,but assumes on

56、ly a portion will go towards sari-sari store dataSource:Expert interviews,BCG analysis 13The key to winning is figuring out how to drive profitability at the core through three key factorsChallenge in implementation123Extend lifetime valueImprove unit economics per order/transactionReduce merchant a

57、cquisition costsIncrease organic engagement to utilize word-of-mouth acquisitionUtilize better UX to improve onboarding experienceConsolidate operations and supply chain to achieve scaleLeverage tech platforms to increase efciencyDrive higher basket sizes through a mix of incentives and promotionsWi

58、den product ecosystem to increase total value-addCapture and enable a larger share of total transaction valueDrive customer loyalty by rewarding high frequency and long-time usersImprove customer education to address gaps in digital literacyKEY LEVERS TO ACHIEVE PROFITABILITYSource:BCG analysis14EME

59、RGENCE OF HOMEGROWN DIRECT-TO-CONSUMER BRANDSWith D2C brands now moving towards omni-channel presence,the potential for growth in the D2C space is exponential.The Philippine economy is largely driven by domestic consumption.However,interestingly enough,there continues to be a large gap in aspiration

60、al consumer products.Luxury western brands win over the upscale market,while older generational brands win the super mass market,but the Philippines has yet to cater to the young population that is quickly turning middle class.Homegrown direct-to-consumer(D2C)brands have begun to fill this gap provi

61、ding an affordable middle where they are able to capitalize on the young middle-class demographic while also being able to capture market share from the high-end and low-end consumer brands as well.Pickup Coffee,one of Foxmonts portfolio companies,is for example changing the coffee game by offering

62、quality coffee at affordable prices.Known for its commitment to“nothing above US$2”,but at the same time rivaling international coffee chains in terms of coffee quality,Pickup Coffee has gained heavy traction since its launch in February of 2022 with a rapid expansion to over In recent years,direct

63、to consumer brands have started acknowledging the need to move online in order to be a leader in their category.The move from offline to O2O has helped D2C brands Since 2019,the top Philippine e-commerce platforms have seen steady year on year revenue growth.Philippine e-commerce players have also s

64、een YoY growth in the number of sellers on their platform,and for one of the leading e-commerce platforms,even with GMV increasing,local brands continue to take up a larger share of total revenue.E-commerce platforms like Shopee,Lazada,and Zalora,have helped D2C brands expand their online audience q

65、uickly.50 operating branches within its first year.Their offline presence,along with their growing online presence through platforms such as GrabFood,Foodpanda and pick.a.roo,have catapulted Pickup Coffee into one of the fastest-growing D2C startups in the Philippines.With more homegrown D2C brands

66、emerging and executing on the middle market strategy,the D2C space is an exciting one to watch.Source:Foxmont analysis Higher End ConsumersLower Income ConsumersGrowing middle market monthly wage earners from US$550(P30,000)to US$1,800(P100,000),aged 25-3515SPLIT OF LOCAL AND INTERNATIONAL REVENUE0%

67、25%50%75%100%Q1 2019Q1 2020Q1 2021Q1 2022LocalInternationalSource:Foxmont analysisQ1 20213.6xQ1 20201.9xQ1 20227.0 xGROWTH OF DAILY ACTIVE SELLERS VS Q1 2019Source:Foxmont analysisQ1 20214.4xQ1 20201.3xQ1 20225.4xREVENUE GROWTH VS Q1 2019Source:Foxmont analysisexpand their reach,grow their brand awa

68、reness and revenue,and remain relevant.As e-commerce continues to grow as a whole,the D2C market also experiences a parallel surge.With the majority of seller growth coming from D2C brands,its clear that consumers are increasingly interested in purchasing directly from companies rather than through

69、traditional retailers.As a result,we can expect to see continued growth in the D2C market as e-commerce continues to evolve and reshape the way we shop.Their highest MoM growth of 154%came after launching their Tiktok Shop in June of 2022.Their revenue post launch has also sustained its growth at ar

70、ound 157%versus pre launch revenue.D2C brands have started producing more engaging content through social media trends such as live selling,tutorial videos,hashtag challenges and more.Colourette,for example,went live on Tiktok from 9pm to 12mn during 11.11 and sold one Colourtint per second within t

71、hose 3 hours of live selling.According to Colourette founder Nina“Because Colourette is a community-centric brand,social commerce has greatly impacted how we engage with our community.First off,it has made the buying process much faster and easier for our customers.Prior to social commerce,consumers

72、 had to navigate away from their social media platform to purchase specific products-a disjointed experience that often led to client fallout.More importantly,social commerce has paved the way to more authentic and organic relationships between our brand and our consumers.Community-building and soci

73、al commerce work hand in hand and one cant be successful without the other.For Colourette,were elated to reap the benefits of both and enjoy the best of both worlds.”Social commerce has also opened up a new space for D2C brands to sell in a much more interactive way.E-commerce has found a new fronti

74、er to dominate:social media.Simply put,social commerce is the use of social media for product discovery and transaction completion within a single application.Through social commerce,consumers can not only browse,but also directly purchase products,all while enjoying a personalized,interactive shopp

75、ing experience that is tailored to their interests and preferences.With D2C brands now able to sell directly on the same platforms that their consumers are already on,the selling experience has become a lot more organic,and the buying experience a lot more seamless.Colourette,another one of Foxmonts

76、 portfolio companies,has always relied heavily on social media to build their customer base,and since the launch of their TikTok Shop has seen incredible growth in their revenue.47%31%74%52%FilipinoRegionalAveragePERCENT OF LIVE SELLERSWHO SELL DAILYPERCENT OF LIVE SELLERS WHO SELL TO ATTRACTNEW CUS

77、TOMERS PERCENT OF LIVE SELLERS WHO CLAIM LIVE SELLING IS MORE PROFITABLE THAN MARKETPLACESSource:McKinsey&Company,Manila Bulletin,Armada Brands,Foxmont Analysis FILIPINOS AND LIVE SELLING16Source:Manila BulletinSource:Manila BulletinSource:Manila BulletinThe future of brand engagement,while still ev

78、olving,points strongly towards greater integration with the target audience.Live selling,direct chats with sellers,and the rise of Gen Z marketing tactics such as brands making personal Tiktok accounts and content more relatable to the youth,has shifted the goalposts of brands towards increasing cus

79、tomer loyalty in various ways that work in concert with the new abilities afforded to them through modern technology.Social commerce is more powerful than ever,and it is the most personable brands that will burst strongly into the new age of the marketplace.Revenue multiple vs month of May 2022MAY 2

80、022JULY 2022SEPTEMBER 2022NOVEMBER 2022Launch of Colourette Tiktok Shop2.71.92.22.23.73.94.4Source:Foxmont analysisCOLOURETTE REVENUEIn 2022,Etaily was given a major project-help bring AyalaMalls,one of the countrys retail giants,online.Through ZingMall,shoppers have the same in-store shopping exper

81、ience they would normally get at an Ayala mall,but through their laptop or mobile device.With Etailys help,Ayala has begun to establish their dominance online as well with over 173 branches,72 merchants,and over 7,000 total products now online.Since ZingMalls launch,the platform is hitting an averag

82、e of 150,000 page views monthly,with average delivery time being an impressive 40 minutes only.How do e-commerce enablers such as Etaily,a Foxmont portfolio company,work?Channel creation and d2c/marketplace managementContent creation and brand marketingInventory and warehousingOrder fulfillment and

83、deliverySource:Armada Brands,Foxmont Analysis,Etaily and Manila Bulletin17 While e-commerce and social commerce platforms are able to help many SMEs get online quickly and easily,e-commerce enablers have been able to help D2C brands further establish their own digital presence.The Philippines has wi

84、tnessed an astounding growth in new webstore creations,with a staggering 3,700 fresh On top of e-commerce and social commerce platforms,the Philippines has also seen a number of e-commerce enablers enter the market with the goal of ensuring that D2C brands successfully thrive in the digital economy.

85、digital storefronts launched in 2022.This represents an impressive 185%increase when compared to the pre-pandemic yearly average of 1,300 new webstores.With the number of webstores in the Philip-pines predicted to increase further by 56%,e-commerce enablers can be a great help in ensuring their succ

86、ess.D2C enablers have granted unparalleled access and reach to consumer brands.Through e-commerce platforms,social commerce platforms and all other e-commerce enablers,the barriers to entry for D2C brands have been significantly lowered.In a sense,these enablers have democratized brand building,lead

87、ing to cost reduction,faster time-to-market,and significant expansion of the brands reach,thus propelling them to new heights.Growth is accelerating at unprece-dented levels,and during the valuable time frame that this market is malleable and maturing,the D2C space is limitless.Supportive government

88、 policies launched within the past few years allow for a more investor-friendly climate.DEVELOPMENTS IN THE PHILIPPINESEase of Doing Business ActReduced steps in bureaucratic processes,easier process for business registration and similar requirements 2018Revised Corporation CodeRemoved capital requi

89、rements and allowed one-person corporations 2019Anti Red-Tape AuthorityCreated the ARTA agency under the Office of the President to monitor and ensure compliance of ease of doing business in the country 2018Innovative Startup ActEncouraged establishment of innovative new businesses 2019Corporate Rec

90、overy and Tax Incentives for Enterprises Act(CREATE)Reformed,reduced and improved the taxation system in the Philippines2021Free internet Access in Public Places Act Improved internet access for all 2017Increased Budget AllocationCongress doubled PH budget allocation to scale up internet access in a

91、ll parts of the country 2021STARTING UPSTARTING&DOING BUSINESS1 1TECHNOLOGICAL PROGRESS3 32 2Build,Build,Build!ProgramCreated 104 infrastructure projects that encourage economic growth and reduced congestion in traditional infrastructure,ICT,health 2017Umbrella FundsIntroduced umbrella funds to prom

92、ote the development of capital markets 2022PSEs Handholding Program Rolled out to encourage SMEs to list on local stock exchange2021Relaxed Foreign Ownership RestrictionsMajor amendments made to relax foreign ownership restrictions on public services,SMEs and retail enterprises 2022CAPITAL MARKETS6

93、6DEEPENING CAPITAL4 4EXIT5 5OWNERSHIP*18Source:Foxmont analysisThe new PH administration has also placed a very large focus on digitalization,launching many projects across multiple government agencies.NATIONAL PROJECTSDICT Broadband ng Masa ProjectMake wifi accessible nationwideThe DICT has current

94、ly begun the process of identifying areas with a population of over 1000 people and little to no internet accessDTI 6-Year Plan for IndustrializationEmbrace Industry 4.0(AI,Intelligent Manufacturing)Encourage the growth of MSMEs especially tech start-ups Deepen global value chain participationUpskil

95、l the PH workforce Modernize the agro-industrial activities regionallyAttract investmentDTI x DOST Regional Inclusive Innovation CentersCreating communities among entrepreneurial Filipinos,supported by strong government-industry-academia collaborationRIICs piloted in 4 regions:Bicol,Cebu,CDO and Dav

96、ao2004-2022The Philippine GDP growth has remained consistent throughout multiple administrations.PHILIPPINE GDP GROWTHSource:International Monetary Fund,World Economic Outlook Database,Foxmont Analysist19Source:International Monetary Fund,World Economic Outlook Database2004200520062007ArroyoAquinoDu

97、terteMarcos2008200920000022-10-8-6-4-2024686.66.57.36.96.87.16.36.36.96.34.34.91.4-9.55.33.96.15.77.6Aquino&Duterte Administrations 2011-2019Strong ReboundPH CONTINUOUS GROWTH2001120102012Historically,the Philippines has proven to be resil

98、ient throughout the past economic crisis,with the least volatility in GDP compared to neighboring countries.If the past is any indication,the Philippines is expected to remain less affected than most despite current macroeconomic conditionsASIAN FINANCIAL CRISIS1997-2000|GDP IN CONSTANT PRICESWORLD

99、RECESSION2008-2011|GDP IN CONSTANT PRICES1050-5-10-9992000-0.63.14.45.24.31.47.33.96.9The Bangko Sentral ng Pilipinas has remained proactive throughout the entire pandemic,leaving the Philippines in a relatively good place despite macroeconomic factors.Source:Bangko Sentral ng Pilipinas M

100、edia and Research,Bangko Sentral ng Pilipinas Price Stability,20Source:International monetary fund,world economic outlook databaseSource:International monetary fund,world economic outlook databaseVietnamHong KongIndonesiaPhilippinesSingaporeThailand The BSP responded quickly to the pandemic by lower

101、ing interest rates and ensuring adequate access to credit for businesses and consumers.During 2020 and 2021,the BSP cut its policy rate by 175 basis points(bps)to 2%,reduced bank reserve requirements by 200 bps to 12%(with a target to further bring this down to single digits,)and provided the nation

102、al government with over US$10 billion in monetary assistance to support public spending.It also adopted the Open Finance Framework to enhance interoperability and cooperation between existing financial institutions and new third party players.Other pieces of legislation,such as the Financial Institu

103、tions Strategic Transfer(FIST)Act,Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery(GUIDE)Bill,and the amendments to the Agri-Agra Law served to reinforce the domestic financial system and strengthen rural development by providing support and credi

104、t to MSMEs and agricultural enterprises during the pandemic.Although an independent body,the BSP has allowed for its reforms to pass quickly and decisively through both houses of Congress under the Duterte and Marcos administrations.Even prior to the pandemic,the BSP had already taken steps to stren

105、gthen local financial stabilitylaunching joint initiatives with the Financial Stability Coordination Council(FSCC)to develop a Macroprudential Policy Strategy Framework and a Systemic Risk Crisis Management Framework,and creating the Office of Systemic Risk Management in 2017 to focus on a data-driv

106、en approach to local market surveillance and policy development.The proactiveness of the BSP in recent years played no small role in allowing the Philippine economy to weather the worst of the pandemic and position itself well to tackle inflationary pressures that started in 2022.It was an early ado

107、pter of rate hikes in 2022,starting in May with a 25 bps increase,and continuing that throughout the year seven more times since then for a total increase of 400 bps to 6.00%by mid-February 2023.In February 2023,the Philippines saw headline inflation marginally slow down.Bangko Sentral ng Pilipinas

108、Systematic Risk Crisis Management FrameworkAs covid restrictions continue to ease up,the Philippines is now entering its post-covid phase where unemployment is falling,GDP is picking up positive momentum and spending especially on recreation,travel and restaurants is rising sharply.GDP is picking up

109、 positive momentum,with 2021 full-year GDP growth at 5.6%and 2022 full-year GDP growth exceeding forecasts at 7.6%.GDP YEAR ON YEAR GROWTH RATES(at Constant 2018 prices)Q12019-2020Q12020-2021Q12018-2019Q2Q3Q4Q2Q3Q4Q2Q3Q4Q12021-2022Q2Q3Q45.95.66.36.6-0.7-16.9-11.6-8.2-8.212.17.07.88.27.57.67.2Source:

110、Philippine Statistics Authority The Philippine unemployment rate as of November 2022 was the lowest since April 2005.UNEMPLOYMENT RATE4%6%8%10%Sept2021Nov2021Sept2022Nov20228.9%6.5%5.0%4.2%Source:Philippine Statistical Authority,Nikkei AsiaNON-PERFORMING LOAN RATIO 2345August2020Sept2020Dec2020March

111、2021June2021Sept2021Dec2021March2022June2022Sept2022Dec2022Source:Regis Partners 2.84%3.61%3.73%3.32%4.61%4.59%4.12%4.2%3.69%3.52%3.17%21 National Economic and Development Authority Arsenio Balisacan,when asked regarding the Philippines post-covid performance,emphasized that GDP growth continues to

112、accelerate,standing out as one of the strongest in the region and comes as the country makes its bid to attract foreign investors.He explains that the“.growth in domestic demand was met by expansion in the services and industry sectors,with production in most subsectors back to their pre-pandemic le

113、vels.”Return to pre-covid activity is also reflected in electricity sales,which grew 9.7%YoY in December of 2022.This full-year domestic demand growth was the fastest in over four decades.Current Governor of the Bangko Sentral ng Pilipinas(BSP),Felipe Medalla,at the 5th BSP Financial Education Expo,

114、explained that more Filipinos now own financial accounts and invest as a result of financial literacy efforts.In order to further increase the level of financial literacy in the country and drive investment and growth,the BSP is also working with the Departments of Agriculture;Trade and Industry;and

115、 Social Welfare and Development to develop capacity-building financial literacy training programs.These efforts aim to improve the financial health of Filipinos who were impacted as a result of the pandemic,and reach a level of financial stability that allows them to take out insurance as a hedge ag

116、ainst illness and disaster.By the end of 2022,the Net Profit After Tax(NPAT)of public companies in the Philippines were up by 45%YoY,with over 85%of them either meeting or surpassing forecasts.On top of this,the non-performing loan(NPL)ratio of Philippine Banks also dipped to pre-pandemic lows.NPLs

117、have presented an incredible challenge to banks already struggling due to the bearish market brought about by the pandemic-as they both decrease bank profitability and slow down the velocity of money in the loan market,causing banks to lend less to businesses and consumers.ExceededMetNot metPERFORMA

118、NCE VS ANALYST PROJECTIONS57%30%13%Source:Regis Partners Source:Bangko Sentral ng Pilipinas Media and Research,Bangko Sentral ng Pilipinas Price Stability,Reuters,Regis Partners,Salisbury Securities Corporation Bangko Sentral ng Pilipinas Systematic Risk Crisis Management FrameworkPH STARTUP ECOSYST

119、EM THROUGH THE EYES OF FOXMONT Compared to our neighboring countries of Indonesia and Vietnam,the Philippines remains to be the most consumption driven,with a young,well educated,digitally savvy and growing middle class.Population7757.65.38.07151651197MillionConsumption/GDP(202

120、0,%of GDP)FY 2022,YoYPoverty reduction(2010-18,%of pop.)Median ageSecondary school(2019,%of pop.)Hours/day(2021)Consumption-drivenHigh GDP GrowthGrowing middle classYoung populationWell-educatedTime onlineSource:Foxmont analysis,World Bank,World EconomicsPhilippine deal activity in recent years has

121、started catching up with regional peers,especially in growth deals.Until recently,larger deals have been relatively underrepresented in the Philippines,with growth deals in 2021 being 50%of Indonesian deal flow.However,as also shown in section II,deals are getting larger,proving that the PH startup

122、ecosystem is developing to more mature companies.Source:Foxmont analysisGrowth deal count as%of total deal count20%16%12%8%4%0%2002020212022A community driven O2O platform curating the best products,content,and deals for mothers in the PhilippinesA community selling platform that helps yo

123、u become an online neighborhood grocery storeA cloud kitchen operator offering customized solutions to F&B brands looking to grow and scale their business across the PhilippinesvAI-powered automation service that drives unprecedented efficiency and profitability to players in the supply chain indust

124、ryEDAMAMAAn international 4PL network that enables merchants with frictionless e-commerce logisticsLOCADSARISUKIKRAVERSEXPEDOCKThe Philippines is a large,attractive market that is ripe for investments.Amongst Foxmont portfolio companies alone,weve seen many successfully raise series A in 2022,includ

125、ing:22Increasingly more deals are happening through investment funds rather than directly through conglomerates-20%0%20%40%0%20%40%CAGR(2017-2021)CAGR(2010-2021)Source:Foxmont deal dataEarly StageGrowthN/APEM&AIndonesiaPhilippines23 Early-stage deal activity remains a big contributor to fundraising

126、activity in the Phillipines,and an enabler for Filipinos who seek to move from a corporate to entrepreneurial career.But since 2017,growth deals have outpaced other investment types.This reflects the general evolution of the Philippine startup ecosystem,with prior cohorts now executing later-stage f

127、unding rounds to continue their expansion and growth.Interestingly,M&A activity has increasingly been rerouted to growth and PE deal activity,as management teams prefer access to local and financial investors.Conglomerates historically contributed 40%to M&A deal activity.What is key is the positive

128、impact that is being created,and this varies by organization.Some are smaller and less scalable but highly impactful to the people they serve.Others are a bit more commercial and more scalable but do not provide as profound an impact.Regardless,the idea is taking one of the most powerful drivers of

129、capital and growth the for-profit enterprise and use this to bring impact to a broader set of stakeholders,in addition to just the shareholders.As an impact-focused VC with an active presence in the Philippines,it is exciting to see the development of the overall startup landscape.We continue to see

130、 the convergence of the strong social space that has always been present in the fast-growing tech-based startup world.We at Accion Venture Lab always screen with an impact mindset.From the very start,we look to understand the theory of change of the startup and how their product and/or service will

131、have sustained positive impact on the lives of our target customer segment the underbanked and underserved Filipinos.And we are seeing more and more Philippine companies emerge in this space.THE PROGRESSION OF IMPACT INVESTING:Impact investing is defined by the Global Impact Investing Network as“inv

132、estments made into companies,organizations,and funds with the intention to In the Philippines,impact investing has been around for at least a decade if we define this as when social entrepreneurship started,and much earlier if we consider when MFIs,cooperatives,and others emerged in the country.The

133、era of social enterprises brought around some great compa-nies such as Rags2Riches,Hapinoy,Bagosphere,and Virtualahan just to name a few.But,like the broader startup ecosystem,the impact space was greatly constrained by the shortage of capital,scarcity of talent,and poor infrastructure.Fast forward

134、to 2023,and despite the slowdown due to the various global and macro-economic issues,there has been a significant advancement in the Philippine startup ecosystem.A confluence of factors,including increased digitization due to the pandemic,improving founder quality and startup talent,and a more signi

135、ficant number of local and regional investors,have led to the start of what will(hopefully)be the tipping point for Philippine startups.And this has had a direct effect on the impact investing space given that in emerging markets like the Philippines,there is a good likelihood that startups will pos

136、itively affect society.By nature,startups are meant to solve massive problems,whether it be the lack of access to financial services,challenges in getting quality healthcare and education,low availability of low-priced food and quality housing,and others.While startups tackle these various issues,th

137、ey also create impact,sometimes intentionally,sometimes less so.So,as the startup scene has grown in the Philippines,it has brought the impact investing ecosystem with it.USUAL PAIN POINTS FOR EMERGING MARKETSimpactful by defaultTransportRetailLogisticsSaaSOthersHealthcareAg and FoodSustainabilityFi

138、nancialServicesHousingClimateEducationEmploymentINVESTING SPECTRUMPositive Measurable ImpactValues Aligned/No HarmMarket Rate ReturnBelow MarketRate ReturnNegativeFinancial ReturnGrantsImpact investingSocially Responsible InvestingTraditional Investing24generate social and environmental impact along

139、side a financial return”.While the definition is straightforward,there is a spectrum of different types of impact investments.The impact investing space is expected to benefit from the maturity of the startup space.An increasing number of startups tackling key issues have already received funding an

140、d have strong potential to scale.Whether it is in fintech,agritech,healthtech,edutech,SME-tech,and others,more startups are emerging as they look to serve and improve the lives of Filipinos.Just as it is for the broader ecosystem,this is just the beginning for the impact investing in the Philippines

141、.Venture Perspectives 25 Over the last few years the Impact Investing space has seen a rush of new entrants which is ultimately good for the venture markets of Southeast Asia and in particular the Philippines.This means there is more capital available for Founders to access when theyre raising money

142、.We invested in Philippines based-Peddlr in 2022 and we were joined by one of the regions leading Impact Investors as well as other well known pure venture capital investors.So there is now a cross-over where cap tables represent both impact investors and pure venture capital investors.The other cha

143、nge we have seen is the adoption of ESG principles by companies in the region.Because ESG is a major investment focus,which has helped fuel the proliferation of Impact Investing and ClimateTech investors,companies are beginning to understand they must have an articulated ESG policy which will make i

144、t easier for investors(both impact focused and general venture capital investors)to more clearly understand a companys approach to ESG and thus the impact they have on their communities and stakeholders.This widens the pool of companies who can receive investment from Impact Investors.Finally,most o

145、f the innovative and disruptive technology companies in Southeast Asia and in the Philippines in particular,are delivering products and services that positively impact the lives of a growing middle class by improving access to financial products,or education,healthcare or employment.Thus the Start-u

146、p and Venture Capital industries are helping to drive impact in the market and that is creating the result of benefiting the wider population and catching the attention of global impact and venture capital investors alike.THE GROWING BREADTH AND DEPTH OF PHILIPPINE FOUNDERS STARTUP ECOSYSTEMIncubato

147、rsCo-working SpacesAcceleratorsAngel Investors&VCHelp entrepreneurs with brainstorming and idea generationCommunal workplaces where entrepreneurs collaborate;55%of coworking spaces were established within the last 3 years aloneGovernmentLocal Government UnitNATLLocal initiatives(conferences,immersio

148、ns,small cash grants,training)Collaboration between DICT,DOST,DTI for govt projects and programsHelp businesses with minimum viable productPrimary funder,but also connects entrepreneurs with the right networks-46%of local VCs have only been established within the last 3 years26 A thriving startup ec

149、osystem cannot be solely credited to the startups themselves.Rather,it comprises a complex network of diverse entities that collectively play a crucial role in fostering the creation,growth,and success of startups.Different players,such as government agencies,angel investors and venture capitalists,

150、accelerators and incubators,and co-working spaces,all contribute to the startup ecosystem of a country.In the Philippines,the startup ecosystem has become visibly more robust,with an outpour of support provided to startups,and this has extended beyond Metro Manila.Government agencies play an importa

151、nt role in bolstering the startup ecosystem through the implementation of regulatory frameworks,financial aid,and programs aimed at nurturing and promoting startups.This is exemplified in section IV of this report,which highlights the proactive measures the Philippine government has taken to aid sta

152、rtups through the passing of multiple laws.At present,joint initiatives and projects by the DICT,DOST,and DTI,such as the Innovative Startup Act and Startup Venture Fund,actively encourage the growth of startups.Furthermore,local government units(LGUs)are also stepping up to the plate,implementing t

153、heir own programs to raise awareness about the startup world as well as drive the success of businesses from their areas.For instance,the LGUs of Makati,Quezon City,Davao,Naga,and more,hold conferences,immersions,and training that provide aspiring entrepreneurs with valuable insights from experience

154、d players in the field.Others create challenges and events through which entrepreneurs can receive modest cash grants.By implementing both nationwide and city-level initiatives,the government has continued to step up as a contributor to the growth of startups and founders.Accelerators and incubators

155、 are organizations that offer a wide range of resources and support to startups.The former aids existing businesses with a minimum viable product,while the latter helps entrepreneurs in the brainstorming and idea generation phase.These organizations provide an array of services,including hands-on me

156、ntorship,comprehensive training,and access to funding opportunities.Moreover,these organizations help startups build crucial networks that are essential in propelling their business forward.The Philippines currently has over 20 active incubators and accelerators,more than half of which were establis

157、hed in the last 2-5 years and nine of which are outside of Metro Manila.Angel investors and venture capitalists are a pivotal force in the startup ecosystem,providing the financial resources that are vital for startups to scale and prosper,as evidenced in section II of this report.In addition to fun

158、ding,they offer valuable expertise,guidance,and extensive networks that can prove instrumental in a startups success.The Philippines has recently seen an increase in venture capital funds present in the Philippines,and more formalized angel investor networks have been established,all creating better

159、 ways for entrepreneurs to connect with investors seeking to offer capital funding and mentoring.Source:City Government of Naga Co-working spaces are a flexible and cost-effective alternative to traditional office spaces.The opportunity to work alongside other like-minded entrepreneurs,sparking inno

160、vation and creativity,has made co-working spaces a breeding ground for success.Equipped with high-speed internet,meeting rooms and office equipment,co-working spaces enable startups to set up their offices quickly and efficiently,allowing founders to focus on what truly matters-growing their busines

161、s,developing new ideas and building the right network.The Philippines now has a total of over 60 co-working spaces offering a diverse range of locations to meet the needs of entrepreneurs across the country,with 30%of them being outside of Metro Manila.Notably,almost half of THE RISE OF FOUNDERS BEY

162、OND THE PHILIPPINE CAPITAL According to Nel Laygo,grassroots founders are problem solvers who possess a deep understanding of their local landscape and its most pressing problems.Their origins in less developed areas grant them a unique advantage in creating products that are not just relevant,but o

163、ften essential to underserved markets.Nina Dizon-Cabrera of Colourette further emphasizes that being immersed in local culture allows homegrown brands to gain a nuanced understanding of the diversity of Filipinos,enabling them to learn about multiple customer segments.Despite these clear advantages,

164、why then have we not seen more provincial founders emerge in the startup scene sooner?Nel Laygo,who founded his business in Catbalogan,Samar,has observed that while grassroots founders often have great solutions to local problems,many lack the necessary tools,training,and mentorship to make their so

165、lutions sustainable and scalable.He has noticed that provincial founders,especially those who lack corporate experience,face challenges in areas such as KPI management,efficient business management,and other critical success factors for their startups-all obstacles however that he believes can be ov

166、ercome with proper mentorship.Other provincial founders voiced similar challenges,and raised additional roadblocks as well.John Vincent Fiel of Wela School Systems from Cagayan de Oro mentioned that funding is not readily available in the provinces,and heavily relies on your personal network of frie

167、nds and family.But Magno Conag believes that in some ways,this lack of funding can be advantageous as it forces founders early on to learn how to be frugal and keep their burn rate low.John Vincent also pointed out that while the technical skill of founders from the provinces is no doubt comparable

168、to those in the metro,due to their lack of exposure to the venture capital world,pitching to investors is an area that requires some improvement.The growth of startup programs and communities in smaller cities throughout the Philippines is now helping to bridge these gaps.In Naga,for example,Magno n

169、otes a significant shift in the startup mindset and development over 27Magno ConagNagafounderNel LagyoSamarfounderthese spaces were built in the past two years alone,showcasing the rapid growth of entrepreneurial ventures in the Philippines.Together,these key players cultivate an ecosystem that nurt

170、ures innovation,entrepreneurship,and economic growth.Each player brings a unique set of skills and resources to the table,which collectively help mitigate the challenges faced by startups.By working together,they have made entrepreneurial success seem a little less daunting and a lot more attainable

171、.We look forward to witnessing further growth and advancement among both new and existing founders,as a result of the ongoing support from these key players in the Philippine startup ecosystem.the past decade.While only a few individuals encouraged schools like Ateneo de Naga to get into entrepreneu

172、rship and innovation ten years ago,many schools and local government units(LGUs)have now started their own initiatives.Currently,the city has its investments board(NCIB),whose primary purpose is to develop local talent and the startup scene to meet the needs of priority industries,and to attract inv

173、estment to the area.The Such initiatives are still young,but their impact is already starting to manifest.Nina believes that as the local community of founders continues to grow and foster candid conversations and fireside chats among its members,success in provincial communities will be expedited.H

174、aving a panel of experts who can share their own skills and experiences is the fastest way to nurture the younger generation of entrepreneurs.Nel emphasizes that unlocking the full potential of provincial founders is achievable by having NCIB also works closely with HAKA,Naga citys startup community

175、,which was established by local startup founders to support up-and-coming startups in the city.Additionally,in 2022,a new project called STEP UP was launched,in which startups from around the region were chosen to participate in a 6-month mentoring program of the DICT and the Bicol Entrepreneurship

176、and Empowerment Center for Accelerating Local Livelihood(BEECALL)to upskill founders and help them move beyond the initial idea stage.These are just a few of the major initiatives coming from Naga,a city with a population of fewer than 180,000 people.According to John Fiel,there has been a shift in

177、mindset among the younger generation.With the addition of more entrepreneurship classes to university curriculums,it is now seen as a highly viable option for graduates.In addition,private institutions such as the Philippine Chamber of Commerce have continued to promote entrepreneurship by organizin

178、g talks and inviting speakers from Metro Manila to share insights about venture capital,angel investing,investor expectations,and other related topics,making entrepreneur-ship seem much less intimidating.As a result,these efforts have helped foster a culture of entrepreneurship,encouraging more peop

179、le to consider it as a career path.According to Nel Laygo,grassroots founders are problem solvers who possess a deep understanding of their local landscape and its most pressing problems.Their origins in less developed areas grant them a unique advantage in creating products that are not just releva

180、nt,but often essential to underserved markets.Nina Dizon-Cabrera of Colourette further emphasizes that being immersed in local culture allows homegrown brands to gain a nuanced understanding of the diversity of Filipinos,enabling them to learn about multiple customer segments.Despite these clear adv

181、antages,why then have we not seen more provincial founders emerge in the startup scene sooner?Nel Laygo,who founded his business in Catbalogan,Samar,has observed that while grassroots founders often have great solutions to local problems,many lack the necessary tools,training,and mentorship to make

182、their solutions sustainable and scalable.He has noticed that provincial founders,especially those who lack corporate experience,face challenges in areas such as KPI management,efficient business management,and other critical success factors for their startups-all obstacles however that he believes c

183、an be overcome with proper mentorship.Other provincial founders voiced similar challenges,and raised additional roadblocks as well.John Vincent Fiel of Wela School Systems from Cagayan de Oro mentioned that funding is not readily available in the provinces,and heavily relies on your personal network

184、 of friends and family.But Magno Conag believes that in some ways,this lack of funding can be advantageous as it forces founders early on to learn how to be frugal and keep their burn rate low.John Vincent also pointed out that while the technical skill of founders from the provinces is no doubt com

185、parable to those in the metro,due to their lack of exposure to the venture capital world,pitching to investors is an area that requires some improvement.The growth of startup programs and communities in smaller cities throughout the Philippines is now helping to bridge these gaps.In Naga,for example

186、,Magno notes a significant shift in the startup mindset and development over 28John Vincent FielfounderNina Dizon-CabreraPampangafounderCagayan de Orothe past decade.While only a few individuals encouraged schools like Ateneo de Naga to get into entrepreneurship and innovation ten years ago,many sch

187、ools and local government units(LGUs)have now started their own initiatives.Currently,the city has its investments board(NCIB),whose primary purpose is to develop local talent and the startup scene to meet the needs of priority industries,and to attract investment to the area.The Inclusion of entrep

188、reneurship in curriculumAccessibility of entrepreneurship opportunities to different departments/collegesIncubators Partnerships with LGUsUniversitiesBuilding of startup communities among first founders Non-profit,non-governement identities like the Chamber of commerce focusing on growing provincial

189、 startupsPrivate SectorTechnology Business IncubatorsAssistance through free use of office space/monitors/wifi Organizes networking and mentorship opportunities(e.g.conferences,pitching challenges)Local Government UnitsTechnology Business Incubators(TBIs),which are mostly academe-run at the moment,p

190、artner with the right venture capital firms and communities of entrepreneurs and mentors.Through this,founders can validate their hypotheses more quickly and bring their ideas to market more effectively.It is clear that all around the Philippines,there is a wealth of ideas and talent waiting to be h

191、arnessed.With the current initiatives and projects already in place,the founder scene beyond Metro Manila has great potential.Source:Google,Temasek and Bain&Company“e-Conomy SEA 2022 report”.Human capital is an essential part of any business and,more so,for the game changers who are working on defin

192、ing and changing the world tech startups.As some of the first members of the company,quality of founders are of utmost importance,and we are incredibly excited about the potential we see in founders operating from the Philippines.SEA tech 1.0 executives leading the way Zalora,Grab,Groupon,SEA and Vi

193、ber are some of the most prominent and impactful technology companies that have been a huge part of our lives in the past decade across Southeast Asia.We are observing a new wave of highly-skilled executives from several iconic technology companies assuming the roles of first-time founders,accelerat

194、ing technological innovation and adoption in the process.What sets the Philippines apart from other tech ecosystems across Southeast Asia is its ability to attract not only founders native to the country but also foreign founders with operating experience from more advanced markets globally.This kno

195、wledge transfer and widening of perspectives have far-reaching implications on the velocity of development of a nascent ecosystem like the Philippines.Filipino diaspora an increasingly available talent pool In the past decade,the Philippines delivered the second fastest growing economy amongst major

196、 Southeast Asian countries while registering the highest rate of population growth.Economic headwinds within the United States acts as a catalyst,which places Philippines firmly as an increasingly attractive option for the more than 1.1m high skilled Filipino diaspora population residing in the Unit

197、ed States to converge back on home grounds to fuel its economic growth story for the future,and we anticipate that the tech sector could get a significant uplift with this influx of highly qualified talent pool.Home grown tech talent pipeline As the first wave of Southeast Asian startups scale to un

198、icorn levels and beyond,we observed a shift in mindset from some of our youngest and brightest minds as they graduate and enter the workforce.Multinational corporations no longer enjoy a monopoly on the best talent.These driven,ambitious young people are considering tech startups as a viable and att

199、ractive career option.They may not start off their careers as tech founders,but we firmly believe in the potential of this young talent pool to become gamechangers in their own right and contribute to the pipeline of future founders within the country.29 At its core,every start-up is a combination o

200、f three things:an idea,capital and talent.While a solid concept is a prerequisite for success,ideas are a dime a dozen.As the saying goes,“Ideas are cheap,execution is everything.”Capital similarly abounds.Even amidst the global tech downturn,there is a whopping$15 billion of dry powder across South

201、east Asian funds waiting to be deployed,with the Philippines increasingly on investors radars.Of the three elements,therefore,talent is the scarcest and most critical resource of all.This is something we recognize at Kaya Founders.We understand that sustaining the growth of our local tech ecosystem

202、requires more than just deploying capital.Part and parcel of our job as venture capitalists is to be recruiters as well,convincing more talented Filipinos to eschew traditional paths and pursue their entrepreneurial calling.So is it our role to demystify and derisk the process of going from zero to

203、one.So how,exactly,have we been doing this?Once founders decide to partner with us,whether through our Entrepreneur in Residence(EIR)Program or via one of our accelerator programs,Kaya acts as an institutional co-founder,providing them with the capital and support they need to get their ventures off

204、 the ground.The EIRs can focus on developing,testing,and building their products without having to figure everything out from scratch or worry about burning through their savings.Whether a founder is a sea turtle,a corporate executive-turned-entrepreneur,an adopted Filipino,a second generation tech

205、talent,a market expander,or a homegrown entrepreneur,our mission is to make the leap to entrepreneurship a little less daunting and,by sharing best practices,to boost their odds of success.Ultimately,as more founders succeed,the bet is that they will serve as role models for the next generation of a

206、spiring founders to give the scary yet wildly rewarding journey of entrepreneurship a shot.BUILDING UP THE LOCAL FOUNDER BASE:Venture Perspectives 30Paying it forward Lastly,it is encouraging and inspiring to observe members of the tech community giving back in their own ways to grow the Philippines

207、 tech ecosystem and enable more tech startups to blossom and succeed.Amongst some of the most prominent and active angel investors in the Philippines are founders who have achieved early success and are seeding the next wave of startups within the Philippines.Conglomerates within the country and exp

208、erienced operators with vast experience in operating and scaling tech companies in the region are taking on the role of availing institutional capital to many promising early stage companies within the country through their respective Venture Capital funds.Most importantly,startup executives and fou

209、nders are exchanging knowledge and helping one another in the true spirit of camaraderie.This culture of sharing and helping is infectious and powerful,building not only a credible and strong founder base,but a wider talent base that will shape Philippines tech industry for years to come.Boston Cons

210、ulting Group partners with leaders in business and society to tackle their most important challenges and to capture their greatest opportunities.Today,we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersem-powering organizations to grow,building su

211、stainable competitive advantages,and driving positive societal impact.Our diverse,global teams bring deep industry and functional expertise,and a range of perspectives that question the status quo and spark change.BCG delivers solutions through leading-edge management consulting,technology and desig

212、n,and corporate and digital ventures.We work in a uniquely collaborative model across the firm and throughout all levels of the client organization,fueled by the goal of helping our clients thrive and enabling them to make the world a better place.Our continuous presence in the Philippines spans ove

213、r three decades and across industries.Our strong local anchorage helps us support both local leaders and multinational companies,unlocking the incredible value potential of this country to shape a stronger,more inclusive nation.We strive to support and help shape a dynamic Tech scene in the Philippi

214、nes.As a core member of the Sinigang Valley movement,we are deeply embedded in the Tech scenestrengthening our ability to identify key trends,activate partnerships,and accelerate Transformation agendas.Foxmont Capital Partners is a Philippine-focused venture capital fund that invests in early-stage,

215、tech-driven,and scalable startups in rapidly digitizing areas such as e-commerce,fintech,and health tech,among others.We drive value for our founders and investors by leveraging our deep operational knowledge and network,building meaningful relation-ships across our stakeholders.Our proven formula a

216、llows us to catalyze disruptive yet sustainable growth for startups nurtured in the Philippines and equipped for the world.This makes us the most attractive independent venture capital firm for investors who want to capture exponential returns in the Philippine startup ecosystem.With our recent Fund

217、 II close of USD 21.3 million,Foxmont is now the first and largest independent Philip-pine VC firm.Now enabled by an amazing group of Limited Partners from both the Philippines and around the world,as well notable institutional investors,such as Pavilion Capital,AppWorks,and Orient Growth,we look fo

218、rward to continuing our investment track record,scouring the Philippine market for great entrepreneurs,and empowering them to build Filipino solutions to Filipino problems.Foxmont provides private capital to sectors and founders that otherwise would have been unable to attract fundingFIRST TIME FOUN

219、DERS(%)6040SeasonedFirst timeFoxmont portfolio generates critical source of income for over half a million Filipino individuals Employees2,450565,000Income earnersINCOME GENERATION THROUGH FOXMONT PORTFOLIONUMBER OF 2022 DEALS17DEALS BY INVESTMENT STAGEPre-seedSeries CSeries BSeedSeries APre-series

220、A60%ABOUT US31The 2023 Philippine Venture Capital Report was inspired by the unprecedented growth of the Philippine start-up landscape,which called for an initiative that would not only document,but highlight key players and movers in this innovative space.In the past 12 months,weve observed an expl

221、osion of new activity within the Philippine startup ecosystem,with thousands of new founders starting their businesses,new international investors participating,and existing startups exhibiting exponential growth capturing their markets despite a larger global downturn.Our team at Foxmont Capital Pa

222、rtners would like to express our deepest appreciation and gratitude towards the following individuals and organizations for their priceless contributions to the ideation and creation of the Report,without whom this project would not have been possible.To Nel Laygo,Nina Dizon-Cabrera,Magno Conag,John

223、 Vincent Fiel,for sharing their invalu-able perspectives on the Philippine Startup Ecosystem.To our collaborating funds:Kickstart Ventures,Patamar Capital,Openspace Ventures,Vulpes Ventures,Accion Venture Lab,Kaya Founders,and Monks Hill Ventures,for continuing the mission to breathe life into start

224、-ups and inspiring local changemakers to transform their visions into reality.To the team,Bea Mantecon,Riva Fong,CJ Carlos,Reuben Paterno,Riche Lim,Julian Cua,along with the Foxmont Investments and Portfolio Management teams for your collaborative efforts to organize and create a comprehensive and c

225、ompelling account of the Philippine Startup Ecosys-tem.We at Foxmont are thrilled to witness the Philippines continuous development and together,we hope to aspire towards ever-greater heights.ACKNOWLEDGEMENTABOUT THE AUTHORSFranco VaronaManaging Partner atFoxmont Capital PartnersJelmer IkinkFounding

226、 Partner atFoxmont Capital PartnersAnthony Oundjian Managing Director and Senior Partner atBoston Consulting Group32JOIN US IN THE PHILIPPINE DIGITAL REVOLUTION https:/ Philippine Venture Capital Report is an annual report covering the startup activity in the country.Foxmont Capital Partners used a

227、combination of online resources,in-house analysis,third-party interviews,and information made publicly-available by databases such as Crunchbase,Preqin,and Pitchbook.Furthermore,data was cross-checked and verified against research publica-tions,news articles,venture capital fund websites,and startup

228、 company websites.Insights from key players in the ecosystem,high-performing startups,and local and regional funds are highlighted to provide expert opinion on the startup and venture capital industry in the Philippines.Startup CompaniesWe define a startup company as an innovation-driven company,usu

229、ally involved in technology,in its early stages of business and characterized by high growth potential,social impact and/or delivering new solutions to consumer problems.This report only covers startup companies domiciled in the Philippines or with significant operations in the Philippines.Investors

230、We define investors as any individual or institution that provides financing to startup companies in exchange for an economic interest in the business.DealsWe define deals as venture capital transactions where startup companies raise capital from external sources,which include financ-ing received fr

231、om venture capital funds,angel investors,angel groups,accelerators,incubators,corporate venture firms,corporate startup investors,joint ventures,private equity funds,mergers and acquisitions,grants,and crowdfunding.DisclaimerNo representation or warranty,express or implied,is given as to the accurac

232、y of the information or opinions contained in this report(the“Report”),and no liability is accepted for any such information or opinions by Foxmont Capital Partners,LLC(“FCP”)or any of its partners,affiliates,directors,officers,employees,agents or advisers.This information has not been verified by i

233、ndependent experts or assembled collectively and is subject to change,and there is no guarantee that the information contained in this Report is accurate or complete and not misleading nor that FCPs opinion of the market is accurate or complete and not misleading.The information included in this Rep

234、ort is subject to updating,completion,revision and amendment,and such information may change materially.No person is under any obligation to update or keep current the information contained in the Report.Any opinions,assumptions and estimates are as of the date indicated and are subject to change wi

235、thout prior notice.This Report does not constitute a prospectus or form part of any offer or invitation to sell or issue,or any solicitation of any offer to purchase or subscribe for,or any offer to underwrite or otherwise acquire any securities,nor shall this Report or any part of it nor the fact o

236、f its distribution or communication form the basis of,or be relied on in connection with,any contract,commitment or investment decision in relation thereto,nor does it constitute a recommendation regarding any securities or transactions.In this regard,by accepting this Report,you acknowledge that we

237、 are not in the business of providing(and you are not relying on us for)legal,tax or accounting advice,you should receive(and rely on)separate and qualified legal,tax and accounting advice and you should apprise senior management in your organization as to our disclaimer as to these matters.FCP or a

238、ny of its related companies or any individuals accepts no liability for any direct,special,indirect,consequential,incidental damages or any other loss or damages of any kind arising from any use of the information herein(including any error,omission or misstatement herein,negligent or otherwise)or further communication thereof,even if FCP or any other person has been advised of the possibility thereof.FCP and its partners,affiliates,directors,officers and/or employees may have positions or other interests in,and may affect transac-tions in securities mentioned herein.34