Author: vivian

Where does the Philippines stand in Southeast Asia startup Ecosystem?

We can’t deny it. Southeast Asia is booming as we see Indonesia and Singapore becoming home to more than a dozen unicorns over the last decade. But then again, if we were to zoom into the Philippines, a different story was told.

Just behind Indonesia, the Philippines is the second-largest country in Southeast Asia with a population of 106 million people. However, its startup scene has yet to produce strong local players that are on par with its Southeast Asian counterparts like Grab or Traveloka.

In the Philippines, there’s only one unicorn: Revolution Precrafted, a property tech firm specializing in luxury prefabricated homes — which drive people to question why?

While the country faces problems like its archipelago being fragmented into thousands of islands or the population struggles with inequality and poverty, these are also the same issues Indonesia faced.

One of the biggest issues, many entrepreneurs claim is holding the Philippines back is the lack of access to capital.

“We have a very young ecosystem and we still need to do a lot in order for us to move on to the next phase. What we need to do is to provide a lot of funding, which at the moment is still at a very low level,” said Rafaelita Aldaba, the undersecretary of the Philippines’ Department of Trade and Industry.

In terms of deal volume, e27 has reported that Indonesian startups have secured at least 46 investments in 2018 which amounts to US$4.07 billion while active startups in the Philippines only raised US$304 million in the same year.

Besides, many entrepreneurs also attribute the Philippines lack of unicorn activity to the general lack of startup entrepreneurship and a conservative business mindset that hinders potential growth.

In other words, the population sees entrepreneurship as highly risky. Founders would have to be able to withstand certain social pressure to start his or her own company and very often, the most difficult part is convincing your parents that it is okay to pursue this path.

As such, the number of tech startups in the Philippines does not tally with the fact that it has a tech-savvy and tech-enabled population.

However, the Philippines’ startup ecosystem is gradually showing signs for the better.

Philippines’ Startup Scene is Improving

Based on a 2019 report by Startup Blink, the Philippines’ startup ecosystem currently places 54th out of 100 countries all over the world. This compared to the results that were done two years ago, the country has moved up 16 places.

This Startup Ecosystem Rankings for 2019 considers the quantity and quality of both startups and supporting organizations in a given location, as well as the context of its larger business environment.

For the Philippines’ increase in rankings, the report credited it to the connectivity between suburbs and cities in the cluster of Metro Manila, as well as the increasing tech literacy and English proficiency among Filipinos.

The population of both startups and local startup incubators are also on the rise in Manila, as notable incubators like IdeaSpace has received a total of 4,386 applications for its annual program entry.

Besides, the lack of entrepreneurship is also seeing a good turn as the government has taken initiative and started improving the state of the startup economy.

They created a five-point plan to foster the ecosystem and encourage entrepreneurial success, actively organizing various entrepreneurship programs such as P3 Program and Kapatid Mentor Me Program that aims to change the state of the startup ecosystem in the Philippines.

Startup Summit Philippines

Startup Summit Philippines

With these collective efforts in helping to change the ecosystem, the expectation is that the Philippines startup ecosystem will grow rapidly in size.

“The Philippines has incredible potential to be a leading startup hub owing to the country’s favorable demographics, available tech talent, and rapidly growing economy,” said Katrina Chan, the Director at QBO Innovation Hub.

“We are starting to see more elements come into place, such as increased investment activity, growing public and private support, rising interest in entrepreneurship which makes me believe the Philippines can live up to its promise and produce the next unicorns to rival the biggest names in the region in the next few years,” she added.

Currently, what we can see with the Philippines is that the country is advancing forward at its own pace with increase infrastructure available, market dynamics, maturing talent, and other economic variables involved in the process.

Who is the Next Unicorn in the Philippines?

Overall, the fintech sub-sector in Manilla is the one to watch. Based on the 2019 Global Startup Ecosystem Report, around 15% of the startup ecosystem consists of Fintech startups.

The country also sees the transaction value of these fintech startups reaching US$5.7 billion in 2018 and is forecasted to nearly double to around US$10.5 billion in 2022.

In a piece of recent news, PayMongo has also secured U$2.7 million seed funding which the startup claims is one of the record-breaking seed round raised for any startup in the Philippines.

Now, for some notable fintech startups in the industry, this includes online lending startup First Circle, mobile wallet, and digital services provider Voyager Innovation.

First Circle, a startup which provides supply chain financing, raised US$26 million in 2018 that sets it up for regional expansion. But on the other hand, and Voyager Innovation were both acquired by larger companies. was acquired by Indonesian ride-hailing unicorn Go-Jek for US$72 million whereas Voyager Innovation which is involved in the delivery of digital services was acquired for US$215 million.

This begs the question if Philippines startups will persevere long enough to become a unicorn, amidst a trend where most startups, statistically 8 in 10, prefer to take the easy exit.

Why Southeast Asian Startups are Choosing Acquisition over IPO

After the biggest success stories of Razer and SEA (formerly known as Garena) went IPO in the last few years, recently the Southeast Asia IPO market is cooling down.

Though you may argue that there is still a list of Southeast Asia unicorns that are yet to be listed, but still from the thousands of startups found in the Southeast Asia region, many are opting for acquisitions and mergers over the route to IPO.

As a matter of fact, venture capital firms predicted at least 700 buyouts between 2023 to 2025.

According to a report by Golden Gates and INSEAD, it is even estimated that the number of SEA startups being acquired by other companies will increase to 759 in three years from now; and this figure alone is larger than the collective figure for the five years from 2014 to 2019.

Michael Lints, a partner at Golden Gate Ventures told Nikkei Asian Review, “The IPO landscape in Southeast Asia is relatively small — besides Singapore and Hong Kong, startups do not have a lot of options to list.”

But it’s not just that. There are high challenges to IPO, especially for tech companies, with the exemplar of high valuation prices fetched by loss-making private tech companies placing many investors under intense scrutiny.

Ride-hailing giant Uber Technologies, for example, which was initially valued at more than US$60 billion saw its post-IPO market capitalization fell to US$54 billion in just a few days.

Specifically. the prediction for the substantial increase in exits is forecasted after 2022 as due to the end of fund life for various venture funds, especially those with funds that have been raised between the year of 2010 to 2012.

At the same time, there will be an influx of fresh capital that will help validate more business models and push more companies towards selling their stakes for growth.

Besides, there’s also a push factor for investors. Regional corporates that are increasingly more active in Southeast Asia are also looking at acquisition as an opportunity to cash out of startups amidst underdeveloped stock markets.

In fact, it is a virtuous cycle as these vehicles and funds are judged by their ability to sell their investments and return the cash back to their investors. Relatively, this also means that they are becoming more dependent on unicorns as they turn into acquirers.

Go-Jek and Grab are reportedly aiming to raise US$6.5 billion collectively in their ongoing funding rounds. By comparison, this is almost three-quarters of the amount raised by 152 companies from IPOs in Southeast Asia that stands at US$9 billion according to Deloitte.

In any case, the most notable regional exits have all been acquisitions.

Take for instance, the sale of the Philippines’ payment company in January was a landmark deal as the startup was acquired by Go-Jek for over US$70 million. And this is just one of the eleven deals that the Indonesian ride-hailing unicorn has made in the last three years.

In fact, that statistics make for more than eight in ten startup exits are predicted to come in the form of acquisition as major buyers like Go-Jek and other unicorns are looking for acquisitions to speed up growth.

“We are seeing a lot of cases where unicorns are undertaking an inorganic growth strategy to fuel their growth runaway,” said Lints. “The acquisition could be complementary to their current product offering and market expansion plans. We believe the acquisition trend would continue as unicorns are looking for ways to grow their market.”

Besides, acquisitions have been one of the better options for companies to expand across Southeast Asia, a region where each country is vastly different in terms of needs, cultures, and regulations. Traveloka, an Indonesian travel tech unicorn has entered the Philippines and Vietnam through acquiring local peers.

At the same time, the increase of non-VC investments also bodes well for M&A activity in the region, as Chinese tech firms like Alibaba, Tencent, and JD have already made several large investments in the region.

And often, such investments are a prelude to future acquisitions, as they are an opportunity for the investor to follow the startup closely and learn more about its market dynamics for several years or months.

While IPO remains to be a challenging option, this shift from IPO to acquisition is in a way healthy for the Southeast Asia economies. As through acquisitions, Southeast Asia is gaining momentum as a thriving ecosystem with attractive opportunities.

Indian Logistics Unicorn Delhivery receives US$115 million investment from CPPIB

Canada Pension Plan Investment Board (CPPIB) said on Monday that it has made an investment worth US$115 million in SoftBank and Carlyle-backed Indian logistics unicorn Delhivery Pvt. Ltd.

This is the second investment made by CPPIB through its Fundamental Equities Asia Group which focuses on emerging markets in the Indian startup ecosystem. Its first investment was made in Byju’s last year in December.

Alain Carrier, the senior managing director and head of International CPPIB commented on the deal, saying that they have found in Delhivery a highly reputable partner who fits well with their focus on supporting high-growth businesses.

With this investment, Delhivery’s valuation is placed at US$1.5 billion and following the deal, CPPIB will also have a seat on the Delhivery board.

Delhivery’s Founder and CEO Sahil Barua said, “We are delighted to welcome CPPIB as a new partner for our next phase of growth alongside our existing partners. The last year has been particularly exciting for us at Delhivery — we have crossed 17 500 pin codes across India, launched 3 new businesses, and created over 10 000 new jobs”

Founded in 2011 by Sahil Baru, Bhavesh Manglani, Suraj Saharan, Kapil Bharti, and Mohit Tandon, Delhivery initially operated as SSN Logistics Pvt. Ltd to provide local on-demand service before it aims to become the operating system for commerce in the country.

Since its inception, Delhivery has become a full-fledged logistics player providing transportation, warehousing, freight services, and overall fulfillment services to various customers in more than 2,000 cities across India.

The startup has also received the coveted ET Startup of the Year award 2019, earning high praise for touching remote corners of the country and creating impact by being a full-stack logistic platform.

Its investment portfolio includes several PE investors such as Multiples Private Equity, Tiger Global Management, and Nexus Ventures. Earlier in March this year, the startup has raised US$413 million (Rs 2890 crore) in a funding round led by SoftBank Vision Fund, alongside Carlyle and China’s Fosun International.

With this newly raised funding capital, the startup plans to further broaden its exposure in the country’s logistics sector and this will be a challenge as it faces fierce competition.

The Logistics Industry in India

Aside from Delhivery, there are many other logistics startups in India such as E-com Express, Blue Dart, Xpressbees, Blackbuck, Rivigo, and Shadowfax among others.

As a matter of fact, Inc42’s State of the Indian Startup Ecosystem 2018 Report has noted over 900 logistics startups as of November 2018.

According to data released by Tracxn Labs in December last year, the startups playing in the digitally-driven logistics and supply chain space in India attracted investments worth US$1.89 billion till then in 2018.

This year is expected to continue the momentum. In May, BlackBuck announced that it had raised US$150 million in a Series D equity funding round led by Goldman Sachs Investment Partners and Silicon Valley-based Accel.

Meanwhile, another major player operating in the space, Rivigo, raised a funding of $65 million in its ongoing Series E round, led by existing investors Warburg Pincus and SAIF Partners.

Indeed, India’s tech-based logistics startups will see heated competition as the startups ramp up to offer their solutions to the existing challenges in the supply chain network. Delhivery will need to play its cards right in order to continue to be in the lead.

Is Vietnam the next leading startup ecosystem in Southeast Asia?

When you think of the startup scene in Southeast Asia, you might think of regional leaders like Singapore and Indonesia which are home to six of eight unicorns.

However, a country in Southeast Asia, Vietnam is quickly following suit. Home to over 95 million people, the country is one of the region’s fastest-growing economies with an average GDP of US$68.78 billion from 1985 until 2017.

In fact, the Nikkei Asian Review has reported that Vietnam’s startup sector is growing at a rapid pace despite a global economic slump, and quickly closing its gap with the regional leaders.

The vibrant startup landscape can be attributed to the support fuelled by the government and accelerators as they aggressively promote entrepreneurship through legal and financial support. In the first quarter of 2017 alone, the country sees 39,580 startups entering the ecosystem.

And according to the joint research by Singapore’s Cento Ventures and Ho Chi Minh city-based venture capital ESP Capital, the first six months of 2019 has recorded the country’s startup investment to reach US$246 million this year through 56 deals.

Investment is also forecasted to exceed US$800 million by the end of the year, which would represent a rise of at least 80% over last year’s US$444 million.

When tracking the investments based on the destination country, Vietnam accounted for 17% of startup investments in the region, increasing 5% for all of 2018, behind Indonesia at 48% and Singapore at 25%.

As a matter of fact, the startup investment in Vietnam began to increase last year, with the online retail, payments and education sectors attracting huge capital injections.

Among startups that raised the lion’s share of funding last year was e-payment app Momo, which raised about US$100 million from American private equity company Warburg Pincus, making it one of the largest single rounds ever raised by a Vietnamese startup.

Other up-and-coming startups in Vietnam like ecommerce platform Tiki has also secured a large injection of funding. Based on ESP-Cento, the round raised US$75 million in March and was led by Singapore private equity firm Northstar Group.

Then, of course, there’s its home-grown unicorn VNG Corporation, which specializes in digital content, online entertainment, social networking, and ecommerce. The startup behind Zal, a communication application with more than 100 million, also recorded a US$29 million investment from Temasek.

Looking at these statistics and moving trends, it seems like Vietnam is in the bare minimum cash-ready and the bet of various investors as the region’s next leading startup ecosystem.

Chinese Autonomous Driving Unicorn partners with Toyota in Race to Brings Driverless Cars to the Masses

Since China released its national guidelines to allow automated vehicles testing on designated streets with a driver present in the vehicle back in 2018, it seems like every other day there’s news regarding the latest advancements in self-driving technologies.

Here’s the latest: is entering into a partnership with Toyota to explore safe mobility services involving driverless technologies.

More specifically, the two companies will work together on a pilot program to accelerate the development and deployment of these autonomous vehicles.

Looking at this alliance that involves the Chinese autonomous unicorn with the Japanese auto giant that makes over 10 million in annual vehicle sales worldwide, unquestionably it will boost their position in the race to bring driverless cars to the masses.

“Autonomous driving technology is the key to creating a better transportation system that will deliver value to the lives of many,” the companies stated in a press release. “Through such collaborations, Toyota and are accelerating the arrival of a safer, more efficient and more enjoyable mobility future for all.”

This announcement came after the self-driving startup revealed its latest test project PonyPilot, that will be testing its “product-ready” self-driving cars within a geofenced area in Guangzhou, which covers roughly 50 square kilometers of central Nansha.

This testing area will be a defined space, covering various destinations including commercial plazas, office buildings, landmark hotels, libraries, and residential complexes. But for now, the PonyPilot will only be accessible to employees and selected affiliates by invitation only.

Founded in 2016 by two former Baidu executives James Peng and Tiancheng Lou, is the first company in the country to launch a robotaxi operation and offer autonomous rides to the general public. But it doesn’t stop there.

The two founders are ambitious and aim to build level 4 autonomous cars which can operate without human oversight for predictable environments, such as industrial parks, college campuses, and small towns, with a tentative development window of 2 to 3 years from now.’s current full-stack hardware platform, PonyAlpha leverages lidars, radars, and cameras to keep tabs on obstacles within up to 200 meters of its self-driving cars.

On the other hand, it might be unlikely to some but Toyota also has an ongoing player in the driverless car foray.

In March 2018, the firm said that its R&D division at the Toyota Research Institution would be building a closed-course test facility in Ottawa Lake, Michigan that will replicate edge-case driving scenarios too dangerous to conduct on public roads.

Also last year, Toyota has revealed e-Pallete, a fully-automated battery-powered electric car that is designed for a range of mobility-as-a-service businesses. While more recently, Toyota has also invested US$500 million in Uber to jointly develop self-driving cars.

Then again, these two are facing competition from many other startups.

The autonomous driving sector has drawn billions of dollars of investment over the past few years and is becoming one of the key sectors in AI. The sector even sees participation by China’s BAT (Baidu, Alibaba, and Tencent), as well as Huawei and many more.

And that is amid the heated competition with the United States for global leadership.

Last summer, German automotive multinational corporation Daimler obtained a permit from the Chinese government allowing it to test self-driving cars powered by Baidu’s Apollo platform on public roads in Beijing.

Separately, Waymo has racked up more than 10 million real-world miles in over 25 cities across the U.S. and roughly 7 billion simulated miles, in November 2018 became the first company to obtain a driverless car testing permit from the California Department of Motor Vehicles (DMV).

Not to mention, other rivals also include Tesla, Zoox, Aptiv, May Mobility,, Aurora, Nuro, among some.

Now you must be wondering – who’s ahead in the race?

According to the California self-driving statistics, Chinese companies are still lagging behind US companies in the field, with Waymo drivers disengaging the auto-drive function roughly every 11,000 miles and Cruise drivers once every 5,200 miles on average over a 12-month period through November last year.

By contrast,, the front runner among Chinese autonomous driving companies has reported human intervention once ever 1,022 miles. However, there’s still some catching up has to do and this deal with Toyota comes in time.

“I think in the huge scheme of things, the biggest challenge is still the uncertainty in the open driving environment,” explained Peng on the obstacles the startup had to encounter to create a sustainable autonomous driving system.

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