Funding Slows But Opportunities Remain: PH Startups Ecosystem Report 2023

The report points to “adverse market conditions” as the reason for the drop in funding.

Fundraising for startups fell in 2023 and significant challenges still persist, stifling the growth prospects of these companies, but there is much to be hopeful for within the Philippine startup ecosystem. These were the findings, in a nutshell, of the Philippine Startup Ecosystem Report (PSER) 2023 published by venture capital firm Gobi-Core Philippine Fund in partnership with Alibaba Global Investments. 

The report was released in time for the opening of the Philippine Startup Week.


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The amount Philippine startups raised in 2023 so far was down 40 percent compared to last year, according to the report. In addition, there have only been around 40 deals made in the year so far, a 21 percent decline compared to the over 50 deals made in 2022. Average deal size, meanwhile, fell 37.5 percent, from around $13 million in 2022 to just over $8 million this year. 

Gobi-Core points to “adverse market conditions influenced by a confluence of factors” for the slowdown in funding and deal count. That includes conservative investor approach in the face of low borrowing costs as well as a shift in investor sentiment amid lower returns from debt investments and increased stock market uncertainty. 

In a survey conducted among startup founders, the biggest challenges facing startups today—in addition to funding concerns and access to capital—include regulatory hurdles and government support, a lack of educational and learning opportunities within the country, infrastructure and resources, cultural issues, and a shortage in talent and manpower. 

“Generally, the founder sentiment on all four aspects reflect the widespread gaps in funding, educational resources, infrastructure development, and government support for Philippine startups,” the report read.

“The majority of founders perceived lacking educational and learning opportunities, highlighting the challenges in accessing resources to acquire knowledge and skills within the startup ecosystem,” it added. “This sentiment emphasizes a need for more accessible and comprehensive educational support to nurture entrepreneurship.”

The report also found that 57 percent of the founders surveyed believe the Philippines ”greatly lacks” funding opportunities, while 74 percent believe that the country lacks government support.

Still, the report also emphasized tremendous opportunities in the Philippines, including high English proficiency and remote work, e-commerce and live selling, a rather large unbanked population, digital financial services, and demand for SMEs and retail loans.

In addition to a thriving digital economy, strong adoption and digital skills, the Gobi-Core report identified rising sectors in the country full of potential: gaming, entertainment (particularly live streaming and live selling), and health tech.

“The entrepreneurs find ways and means to make their businesses work out of an industry-wide belief that the Philippines both deserves and is capable of building a dynamic startup ecosystem,” the report said. 

“Looking ahead, collaborative efforts between all stakeholders are imperative. “Tailored support for promising sectors, fostering international partnerships, and creating an environment that encourages risk-taking and innovation should be prioritized.”


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Paul John Caña
Associate Editor, Esquire Philippines
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