Industry

Manila Drops Off Top 100 Global Startup Ecosystems Ranking

A sobering thought for the local startup ecosystem.
IMAGE FACEBOOK/MAKE IT MAKATI

Much has been said about the thriving startup industry in the Philippines, with constant news about new ventures and fundraisings. But here’s a sobering thought: Manila may not be cutting it compared to elsewhere in the world. 

The Philippine capital has dropped off the list of the top 100 Emerging Ecosystems in this year’s Global Startup Ecosystems Report, which is published by Startup Genome and the Global Entrepreneurship Network. Last year, the country was ranked in the 91-to-100th place. 

In 2020, the Philippines ranked 36th in the world.

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Manila Falls in Global Startup Ecosystems Ranking

Despite the drop, Manila still earned a special highlight in the report, which was made public on Wednesday (July 27). Based on data acquired during the second half of 2019 until 2021, the total ecosystem value of Philippine-based startups stood at $2 billion, which is far from the global average of $28.6 billion; the median amount of seed round for startups is at $150,000 (versus global average of $671,000); while total amount raised in early-stage funding is at $292 million (global average: $687 million).

Only in the median amount for a Series A round did the Philippines post better-than-average numbers: $5 million versus the global average of $4.7 million.

Highlighted in the Manila page of the report was the $1 billion in funding raised in 2021, which is a 179-percent increase from the previous year. Two Philippines-based startups are now valued at over $1 billion: “double unicorn” Mynt, which operates GCash, which raised $300 million in a Series C round; and Voyager Innovations, which raised $210 million in its latest funding round. 

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Also getting special notice in the report are startup superstar Kumu, which raised a $73.6 million in its Series C; and e-commerce startup GrowSari, which raised $77.5 million in its latest funding round.

Despite the Philippines not making it to the top 100 ecosystems, the report mentioned three key reasons for founders to move their startups to Manila: government startup programs (IDEA, ADVANCE, and Global Acceleration Programs which were designed to help startups validate their solutions, commercialize, scale up, and expand globally, as well as funding support through the Startup Grant Fund and the Startup Venture Fund); support for foreigners (the Foreign Investment Act was amended in March 2022 to allow foreign nationals to own an MSME with a minimum paid-in capital of $100,000); and tax incentives (2021 Corporate Recovery and Tax Incentives for Enterprises Act provides export-oriented enterprises and domestic enterprises engaged in strategic activities as defined under the Strategic Investment Priority Plan (SIPP) with enticing incentives). 

Only one city from Southeast Asia was included in the GSER Top 30 rankings: Singapore kept its place from one year ago at number 18.  

Meanwhile, three cities from Southeast Asia made it in the top 100 rankings for emerging ecosystems: Kuala Lumpur (Malaysia) was at 21-30, Ho Chi Minh (Vietnam) was at 81-90, and Bangkok (Thailand) was at 91-100.

Jakarta, which is a known powerhouse in the global startup ecosystem, was curiously not present in any of the lists.

The same five cities (or ecosystems) kept their place in the global top five: Silicon Valley at number one, New York City and London tied at number two, Boston at number four, overtaking Beijing, which dropped to number five.

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The rest of the top 10 includes Los Angeles (sixth), Tel Aviv (seventh), Shanghai (eighth), Seattle (ninth) and Seoul, which cracks the Top 10 for the first time.

One interesting fact about startups over the past year: a record 540 companies achieved unicorn status in 2021, up from just 150 in 2020.

Meanwhile, the GSER's Top 10 Emerging Ecosystems for 2022 are:

1| Detroit, Michigan, USA

2| Hong Kong

3| Dublin, Ireland

4| Minneapolis, Minnesota, USA

5| Houston, Texas, USA

6| Manchester-Liverpool, England

7| Guangzhou, China

8| Research Triangle, North Carolina, USA

9| Barcelona, Spain

10| Brussels, Belgium 

Startup Genome claims its coverage of ecosystems is the most comprehensive research about startups in the world. From just 60 ecosystems in 2018, its research grew to include 150 in 2019 and to nearly 300 today, which it said made it possible to rank the top 40 startup ecosystems as well as 100 emerging startup ecosystems globally.

For the full report, click here.

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Paul John Caña
Associate Editor, Esquire Philippines
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