Foxmont Capital Partners and Boston Consulting Group released the Philippine Venture Capital Report 2024 showing that despite global headwinds in 2023, the Philippines’ startup ecosystem showcased resilience, outperforming its regional neighbors.
It said Philippine startups raised $956 million in 2023, down 14 percent from 2022, but better than the 62-percent year-on-year decline observed by the Global Private Capital Association across Southeast Asia.
The decline was mitigated by the country seeing an impressive 96 deals in 2023, a record in terms of deal volume, marking a 16 percent year-on-year growth from the 83 deals tracked in 2022.
The Philippine share of total funds raised in Southeast Asia also continued to climb to 13 percent from 7 percent in 2022 and 5 percent in 2021.
Coupled with an increasing number of regional funds investing into the country, the Philippines is showing growing confidence for regional and global investors.
“The sustained momentum we see in Philippine startup investments is encouraging, particularly with early-stage deals. We attribute this performance to a deepening pool of strong founders, attractive Philippine macro fundamentals, modest entry valuations and a reallocation of regional private capital,” said Foxmont Capital Partners general partner Jelmer Ikink.
The report highlights that the Philippines reached an inflection point in key digital transformation levers, mirroring trends observed in countries like Indonesia, China and India.
“There are many exciting prospects in the Philippine startup ecosystem. As the landscape develops, we expect to see companies providing deeper value propositions as a core part of their customer strategy. This focus on offering more tailored solutions is in-line with the evolving needs and preferences of the Filipino consumer, who value engagement, trust, and relationships,” said BCG managing director and senior partner Anthony Oundjian said.
The report indicates that the Philippines’ growing labor participation rate is expected to overtake the global average by 2030. It said to fully capitalize on this demographic dividend, concerted efforts are underway within both the public and private sectors to ensure the creation of job opportunities, improvement of the quality of talent and the promotion of entrepreneurship.
It said while the Philippine startup ecosystem is nascent, numerous initiatives have started to facilitate exits for alternative investments, with the government implementing more progressive laws to encourage inbound investments and boost participation in the public market.