Awards, Mergers, and Billion-Peso Funds: Here's What Happened to Philippine Startups in 2020
“Manila brims with entrepreneurial potential,” the Philippine entry in this year’s Global Startup Ecosystem Report (GSER) by Startup Genome reads. “The capital of the Philippines—reputed to be the world’s densest city—is filled with talent and innovative minds.”
The statement pretty much sums up what the startup scene in the Philippines is like this year. The GSER 2020 puts the value of Manila’s startup ecosystem at $1.6 billion, with a total early stage funding of $102 million (about P4.9 billion) over the last two and a half years. With a near-limitless reserve of talent and no shortage of great ideas, the country is primed to enter the big leagues in terms of startups disrupting traditional businesses.
And despite a health crisis that has slowed the growth of businesses worldwide and that has yet to be fully resolved, there were still some pretty significant developments for startups in the country this year.
Let’s break down all the big headlines that shook up the startup community in the Philippines in 2020:
1| Great Deals Raises $12 million
Ecommerce enabler Great Deals founded by Stephen Sy set the tone for the year when it announced that it has raised $12 million during an initial funding round from local private equity firm Navegar. If marketplaces like Lazada and Shopee are shopping malls, Great Deals would be one of the stores or merchants inside, which sells products from clients like Nestle, Unilever, Samsonite, L’Oreal, Reebok, Abbott, and many others.
In an interview with Esquire Philippines in February, Sy proudly said the business is profitable, and plans to use the cash to expand the business through new warehouses, tech R&D, and IT infrastructure.
2| Kickstart Ventures announces $200 million fund to find the next Philippine unicorn
Globe-backed Kickstart Ventures was launched in 2012 with a $2.4 million fund to support emerging startups. It followed up with a $50 million fund that it has since used to back 42 companies globally, including 30 in the Philippines. In March it said a fresh infusion of funds worth $200 million (P9.6 billion) will be allocated to support potential tech unicorns in the country.
3| Oriente banks $20 million to expand in the Philippines
Oriente’s fintech platform in the Philippines is Cashalo, a lending app that now has over three million users in the country. Hong Kong-based Oriente announced that the $20 million in debt funding it secured in March to grow its digital credit and pay-later solutions in the country.
4| Kumu Raises $5 million in Series A funding
Government restrictions were in full force in April, but homegrown livestreaming app Kumu was thriving. In April, the company announced it had secured $5 million (P241 million) in a Series A funding round led by OpenSpace Ventures, along with Kickstart Ventures, ABS-CBN Corporation, Summit Media, Gobi-Core Philippine Fund, and venture capital firm Foxmont Capital Partners. (Esquire Philippines is published by Summit Media).
By October, Kumu reported that it had cracked the number one spot in the Apple App Store list of most downloaded apps, beating the likes of Google Meet and Zoom.
5| CloudEats Raises $1.4 million in seed round
As a cloud kitchen, CloudEats does not have dine-in or take-out options. Instead, it prepares the food and people can order through food delivery apps like Grab, Food Panda and Lalafood. That might have been unthinkable just a few years go, but the pandemic seems to have been the ideal scenario to boost its proof of concept. The $1.4 million (P70.94 million) it raised from angel investors and real estate and F&B companies will go to expanding its operations to more than 100 cloud kitchens for its in-house brands in at least four Southeast Asian countries within two years.
6| Voyager Innovations lands $120 million in investment commitments
Best-known for developing local financial platforms Paymaya and Smart Padala, PLDT-backed Voyager Innovations announced a hefty $120 million (P6 billion) investment commitment from a group of investors, including China’s Tencent, KKR, asset management company IFC and its Emerging Asia Fund. The investment will be used toward Voyager’s expansion in the Philippines.
7| GoodWork does good work, secures $1.6 million in seed round
Ecommerce platform GoodWork is a one-stop shop for all your household services needs. Founded by a former Lazada executive, the platform is where you can go to find laundry services, home cleaning, repairs, and others. The $1.6 million (P76.8 million) funding was led by US-based Chaac Ventures along with Elysium Ventures and Kairos K50, and angel investors from Facebook and Snapchat.
8| Ayannah merges with Indian company
Ayannah is a fintech platform that offers services such as payments, remittances, insurance, and telemedicine. In June, it announced that it was merging with Bengaluru, India-based Electronic Cash and Payment Solutions (ECAP) to create Ayannah Global, which will be based in Singapore. The new company said it was looking to expand its operations in Vietnam and is looking to secure additional funding of up to $50 million through a Series B round.
9| Tonik raises $21 million to launch digital bank in the Philippines
Although founded in Singapore, Tonik is relevant to the Philippines after it was able to raise $27 million (P1.3 billion) this year to launch a digital bank in the country. An initial $6 million was raised in February through Insignia Ventures Partners and Credence Partners in institutional funding round. Both investors participated again in a Series A round in June worth $21 million led by Sequoia India and Point72 Ventures. Tonik was founded in 2018 and was granted a banking license by the Bangko Sentral ng Pilipinas earlier this year.
10| Delivery platform startup led by former Honestbee country manager and Megaworld chief launches
Crystal Gonzalez is best known as the former Philippines country manager of grocery shopping and delivery service Honestbee, while Kevin Tan is CEO of Alliance Global, the parent company of Megaworld, Emperador Distillers, and others. Together the two came up with Pick.A.Roo, the first startup project of Megaworld’s new digital VC firm Agile Digital Ventures (ADV). The grocery and food delivery app focuses on “premium products” especially curated and “approved” by the platform. Tan said ADV has earmarked an initial budget of $5 million (roughly P250 million) for three years as capital expenditure for Pick.A.Roo.
11| Paymongo raises $12 million in Series A round
After securing $12 million (P576.4 million) in a Series A funding round in September, the online payments platform Paymongo has now raised a total of $15 million just a little over a year since it was founded in June 2019. The funding round was led by Stripe, with the company’s other existing investors Y Combinator, Global Founders Capital and a new investor, Bedrock Capital, participating. Paymongo said the capital infusion “will be used to accelerate the rollout of new features and products in its aggressive roadmap and build up its product, design, and engineering teams.”
12| Cirrolytix wins prestigious GEO SDG awards
Data analytics startup Cirrolytix Research Services brought honor to the country when it won the 2020 Group on Earth Observations Sustainable Development Goals (GEO SDG) Awards for the Sectoral category, For-Profit. The company won for its Project AEDES, which uses climate and digital data to improve public health response against dengue in the Philippines. The GEO is a partnership of more than 100 national governments and over 100 participating organizations “that envisions a future where decisions and actions for the benefit of humankind are informed by coordinated, comprehensive and sustained Earth observations.” Project AEDES had earlier won a special COVID-19 edition of the NASA Space Apps Challenge.
13| Biotech startup led by Filipino CEO secures $34 million in Series B round
Intervenn Biosciences is a medical research and biotechnology startup based in San Francisco, California. Its CEO is Filipino engineer Aldo Carrascoso, who is leading a team of internationally recognized doctors, scientists and researchers in developing what can only be described as a game-changer in the field of cancer detection and diagnosis. In November, the company raised $34 million in a Series B round led by Anzu Partners and participated in by Genoa Ventures, Amplify Partners, True Ventures with Xeraya Capital, and the Ojjeh family. This adds to the $9.4 million (P452 million) it secured in 2018, which brings its total funding so far to P2 billion.
14| Philippine Startup Week 2020 goes digital
The annual gathering of the startup community was upended because of the pandemic, but that didn’t stop organizers from mounting the biggest edution of the conference yet. Philippine Startup Week 2020 was held virtually for the first time, drawing 10,000 attendees including startup founders and enablers, techpreneurs, investors, government stakeholders, and thought leaders from across the country and beyond. Apart from the main events, competitions, and ecosystem features, PHSW20 presented a full range of community events throughout the five-day conference.
15| SquidPay gets $2 million in Series A round
Not even a year old, SquidPay is a company that provides contactless payments services through a stored value card and mobile app. Just before 2020 wraps up, the company announced that it had secured P100 million in a Series A round as well as a P100 million credit line arranged by Eastern Securities Development Corporation (ESDC). The company said the funds will be earmarked to establish kiosks and business centers in key areas around the country next year to further widen its reach.
Here's to more good news for Philippine startups in 2021!