Despite the global economic slowdown caused by the coronavirus pandemic (COVID-19), startups in the Philippines managed to pull in an estimated $183.8 million in the first half of 2020, up 384 per cent from the whole of 2019.
According to a report released by Philippine-based venture capital firm Foxmont Capital Partners, local startups raised record capital in the first six months of this year with just 14 deals, or a little over half the number of deals raised during the same period of 2019.
The Philippine Venture Capital Report 2020, which Foxmont produced in partnership with PwC Philippines, innovation hub QBO, fintech firm UBX, and Manila Angel Investors Network, is one of the first that focuses on deal activity in the Philippines.
“Despite the economic burden that COVID-19 has placed on this country and all others, we’ve found one thing to be clear: that startup activity in the Philippines has matured significantly in a very short period of time,” the report said.
The report noted that the financial technology (fintech) sector accounted for over 80 percent of the total announced invested capital in startups during the said period and almost half the deal volume for the 2.5 year period between January 1, 2018 to June 30, 2020.

This indicates that a local pivot from traditional financial services towards tech-driven platforms in the finance industry, the report noted.
“It also reflects a favorable environment for fintech startups, owing to the country’s strong English language use and well-established outsourcing industries,” according to the report.
IT & Software is the second biggest sector in startups after fintech, taking 8 per cent of total deal value for the same period. Most of the activity in the sector relates to telecommunications and B2B software development as corporate entities open up to technology that startups continue to build.
Transport & Logistics ranks third, accounting for 3 per cent of the total deal value. Investment activity in this sector is driven by the rising logistic demands of e-commerce.
“The country is at a turning point in the way business is done, given the digital pivot, as well as the challenges presented by COVID-19,” says Franco Varona, Managing Partner at Foxmont Capital Partners.
Company | Deal Launch Date | Funding Round | Funds Raised | Industry Group |
---|---|---|---|---|
Voyager Innovations Inc | 2018-10-04 | Private Equity | $175 million | Fintech |
Voyager Innovations Inc | 2020-04-06 | Private Equity | $120 million | Fintech |
Multisys | 2018-11-08 | Corporate | $40.73 million | Software & Services |
Voyager Innovations Inc | 2018-11-26 | Private Equity | $40 million | Fintech |
C88 Financial Technologies | 2018-07-30 | Series C | $28 million | Fintech |
First Circle | 2018-10-02 | Series A | $26 million | Fintech |
Tonik Digital Bank | 2020-06-01 | Seed | $21 million | Fintech |
Great Deals E-commerce Corp | 2020-01-01 | Private Equity | $12 million | E-commerce |
Create Labz | 2019-09-12 | Seed | $10.3 million | Incubators & Accelerator |
Black Arrow Express | 2018-07-07 | Series A | $7 million | Logistics |
Sprout Solutions | 2019-10-14 | Series A | $6 million | HR Services |
Kumu | 2020-04-14 | Series A | $5 million | Media & Entertainment |
Inteluck | 2020-03-31 | Bridge Round | $5 million | Logistics |
Black Arrow Express | 2019-12-06 | Undisclosed | $4 million | Logistics |
Ellana | 2020-03-05 | Undisclosed | $3.5 million | Consumer Goods & Services |
Edukasyon.ph | 2020-02-05 | Series B | $3.37 million | Education |
Right Choice Finance | 2019-04-01 | Series A | $2.95 million | Fintech |
PayMongo | 2019-09-25 | Seed | $2.7 million | Fintech |
SendFriend | 2019-02-11 | Pre-Seed | $1.7 million | Fintech |
GoodWork.ph | 2020-05-14 | Seed | $1.6 million | Software & Services |
The report, however, noted that despite exciting prospects for the future, taking the landscape to the next level presents its own set of challenges. It said the lack of external funding has been slowing the growth of the industry in comparison to Southeast Asian neighbours.
“A majority of support systems such as government legislation, incubators, and sandboxes have been focused on early-stage efforts, and initiatives to boost startups in the growth stage towards becoming unicorns have remained scarce,” the report noted.
The Philippine startup ecosystem currently ranks 53rd in the world, with more than 400 startups, 50 angel investors, 40 venture capitalists, and 35 incubators and accelerators.
The country still trails behind SEA neighbors in terms of deal volume, but startup founders and investors expect a promising future in the landscape, Foxmont Ventures said.
“While the number of corporate venture arms, VCs, and angel investors in the country has grown, we still need to catch up with the rest of Southeast Asia. With the world’s current situation, a majority of investors are taking a wait-and-see approach,” Alexander B. Cabrera, Chairman and Senior Partner at PwC Philippines said.