Manila Returns to Global Top 100 List of Emerging Startup Ecosystems

After dropping off the list of the world’s emerging startup ecosystems last year, Manila is reclaiming its place in the top 100. In the 2023 edition of the Global Startup Ecosystems Report (GSER), the annual report on the global state of the world’s most significant ecosystems for startup companies published by Startup Genome and the Global Entrepreneurship Network, the Philippine capital returned to the 91-100 spot, alongside cities and countries like Zagreb (Croatia), Jacksonville (Florida, USA), Luxembourg, Riga (Latvia), Leipzig (Germany), Marseille (France), Gothenburg (Sweden), Kansai Region (Japan), and Cape Town (South Africa). 

The GSER estimated Manila’s total ecosystem value at $3.5 billion (from the second half of 2020 until 2022), which is quite a ways off compared to the global average of $34.6 billion.

In the page highlighting Manila’s ecosystem, the GSER also ranked Manila in the Top 25 for Global Ecosystem in Affordable Talent, in the Top 10 in the Asian Ecosystem in Affordable Talent, and in the Top 20 in Asian Ecosystem in Funding.  

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On a scale of one (lowest) to 10 (highest) in early-stage funding growth, which measures the number of seed and Series A rounds raised between 2021 to 2022 compared to 2019 to 2020, the GSER gave Manila a perfect 10. The report noted how Manila-based tech startups raised a total of $338 million in seed and Series A from the second half of 2020 to 2022, with the median seed round at $265,000, both of which are much lower than the global average ($970 million and $821,000, respectively). However, the median Series A round for startups in Manila is at $8.4 million, which, just like last year, is higher than the global average ($6 million).

Total VC funding for startups in Manila reached $1.3 billion, while the total number of exits from the startup ecosystem from 2018 to 2022 is at 24, seven of which happened within the last year. Sadly, no new Manila-based unicorns (startups valued at $1 billion or higher) were named in 2022 (the global average is four).

Still, the GSER noted the sub-sector strengths of Philippine startups: Fintech, where the Bangko Sentral ng Pilipinas is leading the push to achieve 50 percent digital retail transactions and 70 percent of Filipino adults having bank accounts by 2023; Ecommerce, noting how the Philippines is among the fastest-growing countries in terms of online retail sales growth thanks to a young population and high internet penetration; and Gaming, where 45 million active gamers in the country is expected to push mobile games revenue up 13 percent to $173 billion this year.

“With its young, tech-savvy, and educated young population, along with government and private support initiatives, the Philippine startup ecosystem is rapidly growing and gaining momentum,” the GSER said. “The country ranked #5 in Global Innovation Index 2022 among ASEAN member states and accounted for 3.9 percent of the total $15.8 billion in startup equity funding raised in Southeast Asia in 2022. In the same year, the investment landscape expanded to nine percent from its two percent record in 2020 despite the overall worldwide investment downturn.”

The GSER mirrors the rosy outlook for the Philippine startup ecosystem outlined in Foxmont Capital Partner’s Philippine Venture Capital Report 2023. According to that report, the Philippines raised a total of $1.1 billion in startup funding in 2022, exceeding 2021’s fundraising total of $1.03 billion. Compared to the $40 million raised in 2010 when the startup ecosystem was in its infancy, the total deal value per year for Philippine startups has grown 27x in just 12 years.

Foxmont’s VC Report also noted that, where global venture capital investments shrunk by 37 percent in 2022, the Philippines grew by seven percent from the year prior. 

Global Top 30

Other cities in Southeast Asia joining Manila in the 2023 GSER are Jakarta at 15th place and Kuala Lumpur in 21-30. 

Startup powerhouse Singapore is in the main GSER ranking of the Top 30 ecosystems globally, entering the top 10 for the first time at number 8, up 10 spots from last year’s number 18, enough to make it the highest climber in the list.

The top three startup ecosystems maintained their positions from 2020, with Silicon Valley remaining at the number one, while New York City and London are tied in second place. The rest of the top 10 includes Los Angeles at number 4, Tel Aviv (5), Boston (6), Beijing (7), Singapore (8), Shanghai (9), and Seattle (10).

The GSER 2023 is the 11th edition of the report that “provides insights into the world’s leading startup ecosystems, emerging trends, and key challenges facing entrepreneurs.” Startup Genome says the report is based on extensive research and analysis of data from 3.5 million startups across 290 global ecosystems. 

To read the full report, click here.