Venture fund provider F(Dev), a unit of the Filinvest Group, is looking to supports more start-up companies after it successfully launched four start-up ventures focused on delivering solutions to unique problems in underserved markets.
Launched during the pandemic, F(DEV) has an ambitious goal of building more unicorns from the Philippines in the next five to seven years, adding significant enterprise value to its business network.
“F(DEV) is a venture building outfit that invests in and incubates new start-up ventures. But more than simply ‘starting-up’ these new ventures, we want to rapidly bring them to a level of operational scale that is required to make a real impact. So we also view ourselves as a ‘scale-up factory’,” said F(Dev) managing director Xavier Marzan, who himself has been involved in the start-up or scale-up of two fintech unicorns in Southeast Asia.
With F(Dev), the Filinvest Group, with stakes in diverse industries, including banking, real estate, retail and F&B, hospitality, energy, and even agriculture, has found the right path to navigating the emerging confluence of business trends and digital disruptions.
While venture building has been popular in the US and Europe over the last decade, the model is getting attention only recently in the Asia-Pacific region.
According to Marzan, F(Dev) is not an accelerator that accepts applications from the outside nor a VC fund per se, “bit we identify and invest in potentially viable large-scale start-up ideas and turn them into companies.”
He noticed that the country has been attracting more foreign venture capital (VC) funding with a number of Filipino start-ups receiving large investments from venture capitalists.
While the number of players and value of the startup ecosystem have grown, the Philippines still lags behind other start-up ecosystems in APAC, he said.
Marzan said in the past decades, large Philippine conglomerates and corporations had been the source of capital and innovation in many industries but recent challenges prodded them to explore ways to outrun disruption in their industries.
Issues such as demographic shifts, technological advancement, increased global competition and changes in customer behaviors are pushing companies to keep pace otherwise risk becoming irrelevant in the long run. All of these trends are also being accelerated by more nimble global tech start-up.
Building unicorn-level businesses requires an innovative model that combines a start-up DNA with a venture capital mindset while leveraging the strength of a parent company’s ecosystem, which is what F(Dev) does.
“Kick-starting new ventures and growing them 20x or 100x need a different breed of talent. Everyone needs to be fast, agile, creative, innovative and comfortable with ambiguity. Moreover, people should have an unrelenting focus on solving customer problems and prioritizing customer experiences,” Marzan said.
Just recently, F(Dev) has filled the top positions for two of its portfolio companies, Investree Philippines and Qwote.
Investree Philippines, the country’s first and only crowdfunding platform with a permanent license granted by the Securities and Exchange Commission recently brought in fintech lending and start-up veteran Alex Capulong as its country COO and general manager.
B2B ecommerce start-up Qwote, which made its public reveal at the PH Startup Week in November 2021, is led by new country CEO Bjorn Pardo, who brought decades of e-commerce experience to the team, being the founder and CEO of Xend and co-founder of Jinio as well as an Alibaba eFounders fellow.
In keeping up with the fast evolution of disruption processes, F(Dev) recognizes the shifts in perspective, as VCs who have historically been cautious of corporate spin-outs because of their ties to the mothership are now increasingly becoming open to new ideas. F(Dev) believes that with the right formula, VCs would appreciate de-risking the initial customer validation or R&D through a large ecosystem.
To achieve scale fast, F(Dev) underscores autonomy for start-up teams. F(Dev) teams work in an agile environment with constant experimentation and pivots, something large corporate cultures may find difficult to do. This is why while F(Dev) itself is 100-percent owned by Filinvest Development Corp. It is governed by a senior-level board to shield it from various corporate structures. Funding also comes from the top.
Marzan said this type of autonomy for start-ups does not necessarily mean total detachment from the rest of the group.
Start-ups need the resources of and support from the various corporate C-suite offices, in particular at the onset when a start-up idea is being vetted, he explained.
“Our goal is to eventually scale start-ups to a regional level. Many times, the problems and gaps facing us here in the Philippines are very similar to what other emerging markets are experiencing. “If the companies are spun out of the group, F(Dev) would retain only a minority stake and bring in external VC investment to scale-up the companies further,” Marzan said.