Jump starting Phl startups
SILICON VALLEY – Not far from one of Apple’s sprawling campuses in this region in northern California which is touted as the world’s tech capital, there’s an office called Plug and Play Tech Center.
It’s a hip office with a welcoming vibe and one that’s easy to navigate with lots of spaces for meetings and creating thinking. There’s a wall of handwritten messages from CEOs and business leaders who have visited and there’s a wall of unicorns which the company has backed; some are today’s biggest companies – PayPal, DropBox, Honey.
This Tech Center is a perfect metaphor for the kind of work that Plug and Play does. The company is an early stage venture capital firm which helps startups navigate the world of tech and innovation. It helps them become competitive through its network of innovation centers across 50 major locations across the world.
William Li, Plug and Play’s senior corporate partnership manager, Asia-Pacific, showed us around the headquarters.
After that, the company’s Filipino co-founder Jojo Flores gave us a briefing. This was done virtually because he was in Manila at the time of our visit.
The tens of thousands of miles between Manila and Silicon Valley did not dampen Jojo’s excitement as he talked about the company’s partnership with the Department of Trade and Industry (DTI), which aims to scale up Philippine startups.
No story to tell...yet In all, Jojo says our local startups still have so much room to grow.
He feels the Philippines’ startup environment is still in its nascent stage and still does not have a “unique story to tell” to make it attractive enough for investors and help bring the country up in the global value chain of tech-based products.
“On the tech side, the Philippines does not have a unique story to tell,” he said at a meeting with our group of Filipino journalists which was organized by Global Ties San Francisco as part of the United States’ Friends, Partners, Allies program.
This has been the case in the past 10 years while other Southeast Asian countries have been ground zero for startups that have now disrupted the region, Jojo said.
But despite this, he is optimistic on the prospects of growth, especially with Plug and Play’s partnership with DTI to help Filipino startups.
Rising startup hub
At the launch of the National Startup Accelerator program last month, Trade Secretary Alfredo Pascual announced the partnership. Plug and Play, he said, would connect startups with large corporations and help them attract equity funding.
This initiative hopes to address the gaps in the Philippines’ startup scene.
The target is to have at least 40 startups per year that will go through the acceleration program.
The 40 startups will be showcased on the global stage and hopefully be given the opportunity to be on the radar of venture capital firms and other funders.
Furthermore, the program also aims to identify problems and opportunities across industries, Jojo also said.
Sec. Pascual shares Jojo’s optimism, saying that the Philippines’ young and tech-savvy population makes the country a rising startup hub in Asia.
There are currently roughly over 1,000 startups in Manila collectively valued at approximately $3.5 billion.
In search of unicorns
All these plans about scaling up and helping Philippine startups are a welcome development because if you look at the startup environments in our neighbors in the region, ours pales in comparison.
There is definitely room for improvement for Philippine startups as Jojo said.
But I believe that the government and VCs should also keep a close watch on startups that manage to successfully attract funding so they don’t end up mired in debt or unable to implement their plans.
Remember Revolution Precrafted by Robbie Antonio?
Revolution, which makes prefabricated homes, was once envisioned to be the country’s first unicorn – or startup firm with a valuation of $1 billion – until it stumbled like a weak horse.
Here’s the May 14, 2021 Nikkei report about Revolution’s story:
“Revolution Precrafted is a different kind of unicorn – but then the startup scene in the Philippines has always been a bit different from the rest of Southeast Asia.
“At a time when Singapore-based Grab Holdings and Indonesian rival Gojek were building digital empires spanning everything from ride-hailing to digital payments and more, Revolution and its founder, Robbie Antonio, were promising quick-to-build luxury homes.
“Now, though, the company’s billion-dollar valuation is being called into question, angry customers are considering a lawsuit – and investors and venture capitalists are starting to rethink a new phase for the Philippines’ startup ecosystem.”
At the time, some of Revolution’s suppliers filed a complaint before the NBI against the company for unpaid debts.
Revolution attributed its woes to the disruption caused by the pandemic but said then that the majority of these issues have already been addressed.
In the meantime, the quest for the Philippines’ first unicorn continues.
Manny Maceda, CEO and chairman of global management firm Bain & Co., also said in a separate briefing that we need to build our startup ecosystem because it’s one of the factors that investors consider when expanding in a country.
Indeed, we need to build our local startup scene fast because other countries in the region have already overtaken us by miles and we’re just eating their dust.
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