Manila Falls in Global Startup Ecosystems Ranking
Manila fell in this year’s rankings of Emerging Startup Ecosystems published under the Global Startup Ecosystem Report (GSER) by Startup Genome and the Global Entrepreneurship Network. From 36th place last year, the Philippine capital is now in the 91-to-100th place.
Hanoi is in the same grouping in the list, while big cities in the region ranked higher, including top city Jakarta at number 3 (falling from number 2 last year), Kuala Lumpur at 21-30, and Bangkok at 71-80.
Last year, Manila got a special citation as one of the world’s fastest-growing startup ecosystems.
Based on the GSER 2021, total early-stage funding for startups in Manila reached $101 million, which is much lower compared to the global average of $548 million, while the value of the entire ecosystem is around $584 million, versus the global average of $13.68 billion.
Meanwhile, the median amount of seed round funding in Manila is at $217,000, compared to the global average of $480,000, while the average salary of a software engineer here is only $8,600, which is way below the global average of $44,000. Interestingly, the median Series A funding round is $5 million, which is above the global average of just $3 million.
The GSER highlighted the continued growth of fintech startups in the Philippines, thanks to an “enabling regulatory environment,” and “a high number of unbanked and underserved Filipinos.” The report also cited high-profile funding announcements the past year, including PayMongo’s $12 million Series A financing round; Squidpay’s $2 million Series A funding; and NextPay’s $1.6 million (around P80.6 million) in seed round funding.
E-commerce is also a strong startup subsector in the country, with revenues reaching $5 million so far in 2021 and market volume reaching $8.8 million by 2025. The GSER made special mention of local startup superstar Great Deals, which has so far banked around $41.3 million in funding, including $30 million in a Series B round last May.
Move to Manila
Despite the dip in rankings, the GSER said there are good reasons for startups to consider moving their operations to Manila. Government support is one of them.
“DTI, the Department of Information and Communications Technology (DICT), and the Department of Science and Technology (DOST) are implementing the Innovative Startup Act, to create a startup one-stop-shop, startup central portal, and startup ecozones,” the report said. “The law also established the Philippine Startup Development Program, to provide benefits such as grants, subsidies, visa support, and equity financing to eligible and qualified startups and startup enablers.”
Access to funding is another reason startups should relocate to Manila. “A Startup Grant Fund (SGF) has been created by DTI, DICT, and DOST to provide grants-in-aid for startups to overcome R&D roadblocks and to strengthen their IP,” the report added. “DTI is also administering a Startup Venture Fund (SVF) with the National Development Company (NDC), matching private sector investments and providing equity funding to support startups’ establishment and expansion in key areas.”
In a news release following the publication of the GSER 2021, the DTI reaffirmed its commitment to sustain and continuously improve the performance of the Philippine startup ecosystem.
“We are moving forward in finalizing the structure that will allow us to maximize the utilization and effectiveness of the Startup Venture Fund (SVF) that we are allocating for the development of startup venture in the country,” he said.
“Despite setbacks due to Covid-19, startups remain a catalyst for innovation,” DTI Undersecretary and Competitiveness and Innovation Group member Rafaelita M. Aldaba said, which the GSER quoted. “Leveraging on our strengths, the Philippines will continue supporting startups by reducing barriers to entrepreneurship, providing the right conditions, and boosting their entrepreneurial potential.”
According to GSER, the same five global startup ecosystems from 2020 remain at the top of the rankings: Silicon Valley at number one; followed by New York City and London, which are still tied at second place like last year; Beijing is at number four and Boston is at number five.
The rest of the top 10 are as follows: Los Angeles, USA; Tel Aviv, Israel; Shanghai, China; Tokyo, Japan (which broke into the Top 10 for the first time); and Seattle, USA.
Meanwhile, the GSER's Top 10 Emerging Ecosystems are:
- Mumbai, India
- Copenhagen, Denmark
- Jakarta, Indonesia
- Guangzhou, China
- Barcelona, Spain
- Wuxi, China
- Madrid, Spain
- Zurich, Switzerland
- Miami, USA
The GSER is touted as the world’s most comprehensive and widely read research on startups with 250 ecosystems studied. The GSER 2020 is published by Startup Genome—a world-leading policy advisory and research organization for governments and public-private partnerships committed to accelerating the success of their startup ecosystem—in cooperation with the Global Entrepreneurship Network (GEN). The DTI is a member of the GSER Global Network.