The Filinvest Group, which has businesses in a wide array of industries, including banking, real estate, retail and F&B, hospitality, energy and even agriculture, has launched F(DEV) to build more unicorns in the country next five to years.
In a statement, Filinvest said that F(DEV) as a wholly-owned subsidiary will add significant enterprise value to its parent company. In just over a year in existence, F(DEV)’s current portfolio already includes four start-up ventures focusing on solutions to key problems in underserved markets.
“F(DEV) is a venture building outfit that invests in and incubates new start-up ventures,” said Managing Director Xavier Marzan. “But more than simply ‘starting-up’ these new ventures, we want to rapidly bring them to a level of operational scale that is required to make a real impact. So we also view ourselves as a ‘scale-up factory’,” added Marzan, who himself has been involved in the start-up or scale-up of two fintech unicorns in Southeast Asia.
While venture building has been popular in the US and Europe the last decade, the model is getting attention only recently in the region. According to Marzan, “F(DEV) is not an accelerator that accepts applications from the outside nor a VC fund per se. But we identify and invest in potentially viable large-scale start-up ideas and turn them into companies.”
That is why, he said, while F(DEV) itself is 100 percent owned by Filinvest Development Corp. (FDC), it is governed by a senior-level board to shield it from various corporate structures. Funding also comes from the top.
“This autonomy for start-ups, however, does not necessarily mean total detachment from the rest of the group. Start-ups need the resources of and support from the various corporate C-suite offices, in particular at the onset when a start-up idea is being vetted. As such, another way F(DEV) helps start-ups is by transforming long-and-winding corporate processes, whether they be in commercial units, technology, HR, legal or finance, into short and sharp workflows,” he explained.
“Our goal is to eventually scale start-ups to a regional level. Many times, the problems and gaps facing us here in the Philippines are very similar to what other emerging markets are experiencing. “If the companies are spun out of the group, F(DEV) would retain only a minority stake and bring in external VC investment to scale-up the companies further,” he said.
Marzan noted that F(DEV) recognizes the shifts in perspective, as VCs who have historically been cautious of corporate spin-outs because of their ties to the mothership are now increasingly becoming open to new ideas. F(DEV) believes that with the right formula, VCs would appreciate de-risking the initial customer validation or R&D through a large ecosystem.
Building unicorn-level businesses requires an innovative model that combines a start-up DNA with a venture capital mindset while leveraging the might of a parent company’s ecosystem.
People, of course, are critical. F(DEV)’s team itself is made up of seasoned entrepreneurs, product specialists, venture operators, data mavens, designers and engineers with substantial start-up or scale-up experience, and not just staffed by personnel from the parent company.
“Kick-starting new ventures and growing them 20x or 100x need a different breed of talent. Everyone needs to be fast, agile, creative, innovative and comfortable with ambiguity. Moreover, people should have an unrelenting focus on solving customer problems and prioritizing customer experiences,” said Marzan.
The type of team F(DEV) builds and needs for its venture-building efforts is reflected in its recent recruits for two of its portfolio companies -- Investree Philippines and Qwote.
Investree Philippines, the country’s first and only crowdfunding platform with a permanent license granted by the Securities and Exchange Commission (SEC), recently brought in fintech lending and start-up veteran Alex Capulong as its country COO/GM.
B2B ecommerce start-up Qwote, which made its public reveal at the PH Startup Week in November last year, is also introducing a new leader. The new country CEO, Bjorn Pardo, brings decades of e-commerce experience to the team.