Globe unit beefs up start-up fund to P2.2 B

MANILA, Philippines - Ayala-led Globe Telecom Inc. through wholly-owned subsidiary Kickstart Ventures Inc. has earmarked up to P2.2 billion in a new venture capital fund to help drive the rapid growth of high-potential startups.

Ernest Cu, president and chief executive officer of Globe, said the growth fund dubbed as “Fund 2” targets startups in expansion mode anywhere in the world with clear regional and global prospects.

 “In the Philippines, I have yet to see a startup break through in a big way, not because of lack of talent but because the whole sector is devoid of support. Large tech incumbents operate well here, but startups struggle,” Cu said.

Fund 2 expands on Globe’s innovation thesis and is possibly the largest commitment to early-stage startup investing coming out of a Philippine company.

 “Globe has been finding and working with smaller, innovative startups to boost the quality of its customer experience, with very good results. So good that they get acquired by large global companies at respectably higher valuations! Seeing this potential, we believe that Kickstart can use the fund to help our startup partners to scale even faster via an equity investment,” he added.

Kickstart started in 2012 with a $2.4 million seed fund or “Fund 1” focused on seed and early-stage startups. It also recently received a $1.1 million top-up for 2015 deals.

Investment targets of Fund 1 could be domiciled in any country and have no nationality requirements. Its earlier-stage nature means closer, more frequent mentoring, thus, Fund 1 portfolio companies tended to have some of their operations in the Philippines.

Like Fund 1, investment targets of Fund 2 could be based in any country with no nationality requirements for founders but they are aimed at more developed startups that have validated their product-market fit and are now looking to expand.

Kickstart president Minette Navarrete said the startups could be anywhere in the world and this new fund underscores the company’s confidence that Philippine capital and the Philippine market would support innovation.

 “We are looking for startups that have strategic capabilities of value to communications and digital companies, in which we could invest more significant sums at Series A round and beyond to drive customer adoption and market momentum,” Navarrete said.

She pointed out that Fund 2 is intended to help drive rapid growth in startups focused on the digital communications domain and encompasses telecoms as well as media, data analytics, Internet of Things, financial services, health, education, IT security, and energy and spectral efficiency.

Startups would be able to leverage the relationships of Kickstart within the networks of conglomerate Ayala Corp. and Singapore Telecommunications Ltd networks.

So far, Kickstart has made 20 investments attracting follow-on funding from third-party investors including recognized institutional investors like Y Combinator, 500 Startups, Omidyar, Wavemaker, IMJ Investment Partners, FutureNow Ventures, Seawood Capital, Elea Foundation, and a number of local and overseas angel networks.