National Development Co. (NDC), the state-owned investment arm under the Department of Trade and Industry (DTI), is going to implement a startup venture fund to bankroll new technology firms in the country and ensure their success.
DTI Secretary Ramon M. Lopez made the announcement at the virtual Philippine Startup Week 2021 saying, “This week, I am happy to announce that we will be launching the Philippine Startup Venture Fund with P250 million for 2021 and P250 million for 2022, precisely to make this aspiration a reality.”
Lopez expressed hope that this venture fund will help bring in the much-needed capital accessibility to these innovative startup companies.
“We hope that with more investors interested in the Philippine startup ecosystem, DTI can help inject more capital into local startups to help them grow and scale their operations— expanding their reach and tapping into the sectors that need them most,” he added.
DTI Undersecretary Rafaelita Aldaba also echoed the same confidence of more local startups surviving with the help of more funders. In particular, she said that NDC is going to implement the government’s startup venture fund.
“I'm also very optimistic. Based on what we're seeing right now, there would be more startups that will be able to raise funds, we will be able to create more strong start ups with improved quality with a higher probability of surviving the valley of death, especially now since there are three agencies working closely together in terms of providing all the necessary support at all stages in the lifecycle of a start up,” she said.
Aldaba also mentioned of notable startups that have really been “brightening up the country’s startup ecosystem.”
Aldaba further said there are really bright forecasts for the domestic startups along with the recovery of the domestic economy.
Aside from startup venture funds, raising capital through the stock market or by conducting initial public offering was also proposed as another source of funds for startups.
Lopez further cited in his welcome remarks that the Philippines has been named the startup ecosystem to watch in Southeast Asia.
He pointed out that despite the impact of pandemic on industries and enterprises on all sectors through the first half of 2021, the country has also seen how startups, driven by the impressive level of innovation of talented entrepreneurs and the need to innovate and adapt, have risen to the occasion and revolutionized the way business is done amidst the challenges, limitations and restrictions on movement brought about by the pandemic.
“The impressive level at which our startups and businesses innovate, adjust their business models and create new products, services and solutions, are apparent,” said Lopez.
He cited critical sectors, such as in healthcare, eCommerce, fintech, logistics and digitalization of business processes, ensured that domestic industries and economy thrive and survive.
“Our startups and innovative companies also played a critical role in helping traditional businesses continue to do business, by offering their ground-breaking solutions and services,” he said.
Lopez further cited the e-Conomy Southeast Asia Report, which ranked the Philippines as the fastest growing internet economy in Southeast Asia, with the Philippines registering 93 percent growth rate from 2020 to 2021, while the whole Southeast Asian internet economies are showing double-digit growth.
The forecast growth of transactions for the Philippines is from $9 billion to $17 billion, reaching $40 billion by 2025. We have also yielded 12 million new e-commerce users during the pandemic—the highest proportion of new users in the region.
Leveraging on the country’s strengths—fintech and eCommerce, he vowed that DTI will be continuously working on policies and programs that would encourage startups to keep coming up with new products and revolutionary solutions, as the country’s micro, small and medium enterprises continue to innovate and digitize their operations and business strategies.
The DTI, he said, is working with strategic partners in helping organize b2b and business-matching activities that will connect startups with local MSMEs, as a way of optimizing available market opportunities for startups, while helping MSMEs innovate their business models and go to market strategies.