DTI eyes P125 million funding for startups

MANILA, Philippines — The Department of Trade and Industry (DTI), through its investment arm National Development Co. (NDC), plans to establish a venture fund with an initial capital of P125 million to be able to invest in startups and help them go commercial.

This venture fund will be on top of the P3 billion the government intends to spend to help develop 1,000 startups by 2022.

During the signing of the implementing rules and regulations (IRR) for Republic Act (RA) 11337 or the Innovative Startup Act Friday, Trade Secretary Ramon Lopez said discussions have started to set up a venture fund to be used to help deserving startups go to the next level.

“The discussion has started with how NDC can help with the fund and basically to also eventually co-invest in the winning startup ventures,” he said.

To bring 50 startups into commercialization, the government estimates P250 million would be needed to extend P5 million for every startup.

Lopez said the DTI is looking at an initial P125 million for the venture fund to support 50 deserving startups in the first year of implementation, while the rest of the P250 million would come from the private sector.

He said the DTI would come up with guidelines on how to select startups that would be covered by the venture fund.

Also part of the guidelines is up to how much NDC could invest in the startups.

Apart from supporting startups ready to move to commercialization, the government is also looking to assist startups in the early stages of development.

In particular, Department of Science and Technology (DOST) Secretary Fortunato dela Peña said the government would need P3 billion to support 1,000 startups by 2022.

Signed into law last April 26, the Innovative Startup Act aims to implement a Philippine Startup Development Program which includes providing benefits and incentives for startups or any person or registered entity in the Philippines seeking to develop an innovative product, process or business model.

With the IRR signed by Lopez, Fortunato and Department of Information and Communications Technology (DICT) Secretary Gregorio Honasan, the three agencies would form a steering committee to implement the law and develop the overall program for the development of startups in the country.

Lopez said startup ecozones would also be put up to spur the growth and development of startups and startup enablers.

“Further, we will work with the Board of Investments on a Startup Investment Development Plan. This plan will develop short, medium, and long-term strategies to spur investment in, and promote the growth and development of startups and startup enablers in the country,” Lopez said.

Earlier this year, RA 11293 or the Philippine Innovation Act which seeks to set up an innovation fund for enterprises developing innovative solutions to benefit the poor, was also signed into law.

Under the Philippine Innovation Act, an initial P1 billion revolving fund would be set aside for the initial year of implementation of the law to be administered by the National Innovation Council composed of the President, as well as the heads of the National Economic and Development Authority, DTI, DOST, DICT, Department of Agriculture, Department of Environment and Natural Resources, Department of Health, Department of Transportation, Department of Energy, Department of National Defense, Commission on Higher Education, Department of Budget and Management, Department of Education, Department of the Interior and Local Government, Department of Foreign Affairs, Department of Labor and Employment and Intellectual Property Office of the Philippines.