A new venture investment company is set to launch soon in the Philippines, an executive linked to the firm said. Joe Maristela, founder and chief operations officer of Manila-based healthcare business process outsourcing (BPO) firm Star Business Center told DEALSTREETASIA that the upcoming venture capital firm, that would be named Tadhana Ventures, would also serve as a social enterprise.
Tadhana is a Filipino word which means “destiny” in English.
Maristela, who tags himself as a ‘Healthcare Serial Startupreneur’, said Tadhana Ventures would have social criteria for startup investments, similar to the objectives of the Philippine Development Foundation (PhilDev),a non-profit organization focused on education, innovation and entrepreneurship, with which he is also associated.
“For now, Tadhana Ventures will have $1 million investment fund,” Maristela said. “I am finalizing the board and also working with startup networks to find more startups quicker.”
Maristela added the very goal of Tadhana Ventures would be to invest in startups which could make a positive social impact and also go international.He had recently invested $100,000 in local financial technology (fintech) startup Satoshi Citadel Industries (SCI).
In an interaction with DEALSTREETASIA, Maristela spoke at length on Tadhana Ventures, like the early steps the venture plans to take. Edited Excerpts.
What can the startup community expect from Tadhana Ventures after its launch?
There is a regular forum that is being put together by entrepreneur groups. It will start most likely in June. I’ll sit on a panel and these startups will pitch. Things like this will get our fund to be able to see more startups in rapid succession. Hopefully we’ll get a regular monthly forum going via a few channels. Plus we will team up with NGOs like PhilDev to educate the startup community on established best practices and strategies, depending on their business. And hopefully it will spread the word and try to convince Filipino companies to stay in the Philippines or at least try to return the value to the Philippines. Many friends in the US are interested in Manila and we’re hoping to corral them into keeping the capital [fund] in Manila.
Is there a particular niche that you are trying to focus on or tap?
For now fintech is a good niche. It can get the most bang for the buck especially in terms of doing social good. Bitcoin is stepping in the right direction. These products will help the unbanked in the provinces for sure. Fintech is holding a lot of promise I believe and feel that.
What is your criteria for investing in a startup?
We’re game for everything. We would rather seed at a very early stage. We want to be part of a group where we can have a lot of impact on. We need something that solves a solution well but is packaged and formatted in such a way that it can be consumed outside the Philippines as well. Another criteria is there has to be some kind of social dimension to it. Something that solves a societal problem, that adds something to society.
We’re gonna be competing with a lot of other angels. Many are coming out here. There are a lot of Filipino success stories in Sillicon Valley. I used to be an independent day trader. I had a trade station account in the states and I’m still active. I have contractor coders, we build trade center programs and then we run it. Maybe sometime in the future we can try something like that here.
How long have you been a tech investor and what drove you to invest in tech startups and other companies?
My father and I have been accredited angel investors in the States for a while now. Our investments there have largely focused on tech in the healthcare space, such as our investment into and partnership with companies like Practice Fusion, Kareo, ZocDoc, Ringadoc, and other. We’re diversifying this year, however, not only in investing theme (investing outside of healthcare), but geographically as well.
The trend’s long been developing: Wall Street and Silicon Valley venture funds have been seeding in Southeast Asia. Microsoft, Google, and our very own Filipino American success stories, such as Dado Banatao, have all been seeding and “venturing out” to the Philippines. In 2009, we migrated our BPO and call center to the Philippines from Oregon (USA). In 2014, we began with a few small investments. One that we can speak of publicly is Satoshi Citadel Industries (SCI), a bitcoin “lab,” holdings company, and incubator with a number of promising verticals such as a remittance product called Rebit, and a few others that I’m not allowed to mention just yet.
How do you find investing in the Philippines?
Still learning and establishing. There was a learning curve with setting up a BPO and call center in the Philippines—there are blatant differences in labor and employment laws between the Philippines and the States, for example. I’m expecting there to be a learning curve with investing in the Philippines as well. I’m not sure if I should go into the details and complexities of working with a Philippines-based company that’s operating products out of the Philippines but seeking funding in the States, Hong Kong, etc. Aside from legalities, there are the expected cultural layers—grab from the handbag: Filipino sentimentality; celebrity infatuation; etc.
What kind of tech business opportunities do you see in the Philippines?
Filipino tech is extremely undervalued—but it’s not going to stay that way for very long. It’s obvious to me that the Philippines’ heritage and cultural context make the Philippines a given for success on the international tech development stage. All of the attributes that make the Philippines a great environment for BPOs to set up operations in these attributes only contribute to the Philippines’ likely success in tech. The laws here are in English. Most professionals above a certain pay grade, speak English. Being Filipino is very much like being American—to me—in that, Filipino is more so a matter of culture, lifestyle, values [nationality], a person’s narrative, and less about race and ethnicity.
How can the Philippines differentiate itself from the rest of the tech world?
Answer is easy. There’ll come out of this country a product that will synthesize all of this country’s strengths. Some of the best hackers in the world are from the Philippines; And the Philippines is a social, emotional, and passionate society. A product will come up—and it may very well be a hardware-software combination of a product—and it will be universal, in the same way that Filipino OFWs are able to universally assimilate in almost any environment. I get a lot of pitches for apps that post, broadcast, tweet emotional statuses and well-being.
What are the challenges or digital gaps do you see here worth solving, especially on a business perspective?
Obviously, the internet. The government’s gotta step in here, and enable the widespread distribution of fundamental utilities such as electricity, clean and drinkable water, and even the Internet. This country can afford it, financially. And in this day and age of uber creative financial products. But even if the government and our country’s leadership doesn’t man up to this task, private individuals can execute on workarounds. Never mind the digital gap. As long as there’s a digital space of any kind, we, as Filipinos, will make it work.
What is your advice for startups to succeed?
Based on my experience to date, a lot of startups are excited about their product. Somehow they get delusional a little bit. All of a sudden maybe a team member of angel investor starts talking about raising fund or VC funding, doing these circuit, or they’re being invited by an incubator in the States and they go super crazy, they lose focus. They don’t care about the product anymore as they get busy meeting with a lot of VCs. But they should understand that’s the job of VCs. They have to do a million interviews before they pick one.
I think startups need to expose themselves to the other side and they can do that by watching startup shows so they can see what it’s like on the VCs and they can see wether or not they’re just being played or being brushed aside. It’s good to be aware of that, but 99 per cent of the effort should be on the product. Don’t get caught up on things like raising funds or spending money on user acquisition, those get-rich-quick kind of things. There’s an original idea that you have before and you’re passionate about it. But have you sustained it? If not, then you should think wether or not you should call it quits. There’s no harm in calling it quits. Everybody just needs a plan for an exit wether it’s about going back to work, getting a real job and then recovering some of your funds or whatever your exit might be.