PH: IdeaSpace opts for equity-free funding, opens 2016 startup contest

From left are IdeaSpace associate director for business development and partnerships Goldy Yancha, IdeaSpace executive director Diane Eustaquio, Tactiles co-founder Joshua de la Llana, and IdeaSpace associate director for advocacy Dustin Masancay.

Philippine-based tech startup incubator and accelerator IdeaSpace Foundation has opted for equity-free funding, as it opened the fourth edition of its annual startup contest or 2016 startup competition.

IdeaSpace executive director Diane Eustaquio said they will no longer have the 20 per cent equity in each of the startups that will undergo its incubation and acceleration process in order to further help founders in pursuing their innovative ideas.

Equity-free funding is a new, yet bold trend among accelerators and incubators. Just last week, 23 startups from Indonesia, India, and Brazil set off to Google HQ in Mountain View in California, for the first round of the Launchpad Accelerator Program – a six-month course that offers mentorship, training, support with equity-free funding. Google will extend this programme to other countries in the future.

According to IdeaSpace’ executive director, the new equity-free funding structure will help strengthen its commitment to the local startup ecosytem and help bring out the most socially relevant innovations, relevant to emerging economies such as the Philippines.

Initially, IdeaSpace was taking a 20 per cent equity stake with an aim of making the incubator more sustainable but later realised that it would take much longer for these startups to realize the return of the 20 per cent equity.

“It is not fair to the founder to continue developing the product while we get 20 per cent equity. So every year we have to provide what that 20 per cent means,” Eustaquio said.

Also read: Philippine startup community gains more ground in 2015, gears for drastic changes this 2016

“The objective in the beginning was a CSR (corporate social responsibility) effort, so let us keep it that way,” Eustaquio said. “So it is equity fund free. We will not dilute, or decrease the kind of support. It will still be up to P1 million but it will be tough for all the startups.”

The IdeaSpace chief also disclosed plans of selling back the shares of founders to other investors and companies within the MVP Group may be interested in such shares.

“It is reallly up to the startup to decide if they want us to sell the shares, let’s say in a bigger fund and that would be more beneficial to them,” Eustaquio said.

Founded four years ago as a non-profit foundation, IdeaSpace received P500 million fund from the MVP Group of companies to conduct a five-year commitment towards growing the local startup ecosystem.

Among the companies supporting IdeaSpace are First Pacific, First Pacific Leadership Academy, Metro Pacific Investments Corp (MPIC), Metro Pacific Tollways Corporation (MPTC), MPIC hospital group, PLDT, Meralco, Smart Communications, Digitel Mobile Philippines Inc (DMPI), and its mobile brand Sun Cellular, SPI Global, ePLDT, Indofood, Philex Mining, Maynilad, MediaQuest, and TV5.

Also Read:  Philippines 2015: These 16 tech-driven startups made a mark as investors bought into their ideas

“The IdeaSpace funding will still be the same until 2017, and after that we will be on our own, self-sustaining,” Eustaquio said, adding IdeaSpace still has a significant amount of budget since it did not made too much investment last year.

IdeaSpace is inviting interested groups and individuals, both local and foreign startups in Southeast Asia, to submit their startup ideas via its website for evaluation until March 18, 2016.

The top 20 ideas from this pool will be screened by an esteemed panel of judges, and the top 20 early-stage startups that will enter incubation will be announced by July 5, 2016. At least 10 of these startups, meanwhile, will enter the acceleration phase beginning August 1, 2016.

Also Read:  14 Philippine startups to watch out for in 2016

Those who enter the acceleration phase will have access to up to P1 million funding which will include up to P500,000 in cash, while non-cash benefits such as housing, transportation, incorporation, office space, communication, software support, trainings and classes, as well as mentoring from executives of companies under First Pacific.

IdeaSpace has helped incubate about 38 startups as part of its half a billion-peso funding since it was instituted in year 2012.

Some of the program’s most notable alumni include: SALt, a startup that has developed an innovative saltwater lamp and was featured during the recent APEC Summit 2015 in Manila; PinoyTravel, a startup which helps solve provincial bus reservation woes of commuters; Mobkard, which helps consumers save on purchases through discounts and promos; and Tactiles, which developed an educational toy that helps children learn electronics while playing, among many others.

Also Read: 

Philippines’ Tactiles breaks crowdfunding record, tagged a milestone in local startup community

We have passion, tech, talent. We need an entrepreneurial support system: Filipina startup SALt founder tells Obama

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.