Corporate Innovation in the Philippines
The Philippines, despite its infancy, has been showing some progress in developing innovation systems within organizations. The largest conglomerates in the country, such as the Ayala Corporation, JG Summit Holdings, Aboitiz Equity Ventures, and PLDT, have shown this progress in developing innovation systems. These organizations have installed formal innovation units headed by Chief Innovation Officers, who build, manage, and invest in their respective internal innovation efforts and external investments and partnerships with the Philippines’ tech startup ecosystem. Corporate venture capital investments and M&A deals compose the majority of the corporate innovation activity in the Philippines.
However, other corporations within the rest of the Philippine have yet to adopt the innovation mindset and create a formal enterprise-wide innovation structure embedded in their organization. Many large corporations within the country are lagging in innovation to their tech startup counterparts.
Five Filipino Venture Capital Firms Backed by Traditional Conglomerates
The Top VCs in the Philippines
Venture capitalists provide more than funding to startups; they provide a variety of different benefits and opportunities. Startups gain specialized insights, a support team of experts, and various network connections once gaining investments from a venture capitalist firm.
According to an article by Tech Collective, a venture capitalist’s investment choice translates to a “vote of confidence” of the potential of a startup’s growth and profit-making capabilities. Many venture capitalists from developed economic centers worldwide, such as Japan and the USA, have seen the Philippines’ investment potential and are heavily investing. Just like international venture capitalists, Philippine-based venture capitalists are also investing in Philippine-based startups.
The top VCs, according to Tech Collective, in the Philippines are:
- Kickstart Ventures
- Future Now Ventures
- Narra Venture Capital
- First Asia Venture Capital Inc.
- Gideon Venture Capital
5 Filipino Venture Capital Firms Backed by Traditional Conglomerates
According to the Philippine Startup Survey of 2017, most startup founders cited capital and regulatory requirements as significant challenges when beginning a startup firm’s ventures. Because of these barriers, the Philippines has been lagging behind other countries in developing innovative startups. However, according to an article written by e27, if major conglomerates had invested in the Philippine-based startups earlier, startup founders could avoid such challenges.
In the past, many large corporations’ strategies, when potential startups display disruptive capabilities in the market, were to drive such startups out of business or buy them out of the market. Nowadays, large industry players have started to change tactics in regards to high potential startups. These large industry players have now begun to support and build high potential startups to expand the corporation and share the benefits once they reach success.
Examples of Filipino VC firms that gained backing from traditional conglomerations are:
- Kickstart Ventures backed by Glove Telecom (Ayala Corporation)
- PLDT Capital backed by PLDT
- IdeaSpace Foundation backed by MPIC (First Pacific)
- JG Digital Equity Ventures (JGDEV) backed by JG Summit (Gokongwei Group)
- Agile Digital Ventures backed by Megaworld (Alliance Global)
Filipino Tech Startup Ecosystem Leading Innovation in the Country
The Philippines is decades behind the global startup and innovation ecosystem compared with innovation epicenters in the world like Silicon Valley, Israel, and even our ASEAN neighbor – Singapore. However, the local startup ecosystem has begun to change. In the last five years, a rise of tech startups has occurred, local and international investments surged, and more visible government participation. The recent global investors’ investments such as Kohlberg Kravis Roberts & Co. LP (KKR), Tencent Holdings, and Ant Financial Services Group prove that the Philippines has a promising and more robust startup ecosystem.
Check out the Digital Transformation Fellowship program starting on January 12 to learn more about venture capitalism, digital innovation, and much more from experts around the world. Find more information here: https://embiggenconsulting.com/digital-transformation-fellows/