Limited funding impedes startup industry growth

CEBU, Philippines - Industry players have said the rising Philippine startup community has the potential to help the nation’s innovative technology challengers.

However,  the World Startup Report noted the limited seed funding from potential investors remains a challenge for the country’s information technology and startup industry.

It revealed that as of March this year, the country has challenged to locally generate venture capital money (a financial capital provided to growing startup companies) aside from seed funding.

On the other hand, players in the startup community said the country’s talented people should be able to produce innovative ideas that would encourage investments from funders, accelerators and incubators.

During the Geeks on a Beach conference in Mövenpick Hotel in Mactan Island Thursday, Founder Earl Valencia of IdeaSpace Foundation said that funding of potential startups has recently been improving, saying innovations have notably increased. IdeaSpace is a local startup incubator.

Incubators mentor and give funding to select startups that have the potential to succeed and can solve the current local and global problems.

Geeks is the term used for people who are passionate about startups, technology and design. Startup is basically a fledging business enterprise which moves from the idea stage to fund searching and starting operations. In fact, social sites Instagram and Facebook are startup products.

Valencia also noted local startups are increasing and are pushing fast economic growth in the country, citing important factors that have contributed to the expansion of the community.

Funding for startups

The fact that the Philippine economy is the second fastest growing in Asia and the improving investment grade have increased the confidence of investors to help startups which need funding.

“The Philippines can lead emerging market innovations,” the founder said. “Funding is flowing into the Philippines. There is funding path from research and development.”

In an interview with reporters, Dave McClure, founding partner of 500 Startups, said the Philippines, Thailand and Indonesia are great nations for startups to grow, mainly citing the improved venture capital industry.

Tina Amper, founder of TechTalks.ph (a non-profit society of business, technology and startup enthusiasts), said Filipino startups particularly the innovation-driven enterprises need the support from the government and investors to succeed.

The GOAB technology startup forum is just one way to give homegrown startups the opportunity to link with prospective international founders and investors and business partners who can help fund their enterprise concepts, she said.

Amper likewise emphasized the need to use the talents and unique ideas of tech entrepreneurs in the nation and lead them to creating new innovations, products and services and jobs.

For his part, Dave Overton, founder and CEO of Sym.ph, said collaboration among stakeholders is key to the growth of the digital economy.

He explained tech startup founders have faced the apparent gap between technical knowledge and the talents they possess and “the business skills and other related requisites for them to actually succeed.”

While competition is present, common benefits can drive industry players to cooperate, he added, saying “Cooperation is what fuels innovations.”

Digital adaption

During the said forum which gathered more or less 300 startup investors and industry experts, Deputy Executive Director Mon Ibrahim of the Department of Science and Technology’s Information and Communications Technology Office said Asean region can become a global leader in digital adaption as mobile usage in various countries has been increasing.

He mentioned the promising economic conditions of Asean nations will make the region “the ninth largest global economy by 2020.”

The director also cited the young population, the growing middle class and Internet users, the expanding mobile penetration and the availability of Internet connectivity -- with free WiFi now in some places -- would collectively spur Asean’s ICT industry. (FREEMAN)