Phl Startups: A 25-year journey of growth and grit
The Startup Venture Fund, managed by the National Development Company, now allocates over P1 billion in co-investments for qualified Philippine startups.
After over two decades of uneven but undeniable progress, the Philippine startup ecosystem is at a critical juncture. Whether it builds the next unicorn or gets outpaced by regional neighbors will depend on how quickly it can decentralize innovation, close the funding gap, and retain its best talent.
Photograph courtesy of DTI
Over the past quarter-century, the Philippine startup landscape has evolved from a largely business process outsourcing (BPO)-driven economy to a diverse ecosystem marked by fintech innovation, e-commerce platforms, AI experimentation and digital banking.
What started as call center operations in the early 2000s is now a dynamic community of over 1,100 startups navigating challenges and chasing global relevance.
The year 2000 saw the Philippines become a magnet for offshore BPO services. Leveraging English fluency and a young labor force, the country became one of the world’s top outsourcing destinations. This laid the foundation for a digitally skilled workforce and the early rise of tech-enabled services.
Unicorn status
In 2004, Globe Telecom launched GCash as a simple SMS-based mobile wallet, initially meant to support basic money transfers.
Twenty years later, it has transformed into a full-scale financial ecosystem with loans, savings, insurance, and investments, now used by more than 80 million Filipinos.
Its parent company, Mynt, reached unicorn status in 2021, and GCash’s valuation has climbed to over $5 billion (approximately P286.5 billion) as of 2024.
Other homegrown ventures followed suit. PawnHero brought pawn transactions online, Kalibrr modernized recruitment with AI and job matching, and MiCab attempted to challenge foreign ride-hailing apps by working directly with taxi operators in Cebu and Manila.
By the mid-2010s, organized support systems began taking shape. Local accelerators like IdeaSpace, QBO Innovation Hub, and Kickstart Ventures provided mentoring, seed capital, and global exposure to early-stage startups.
Innovation hubs
Venture capital began trickling in, and the Department of Science and Technology, the Department of Trade and Industry, and the Department of Information and Communications Technology began collaborating with the private sector to build innovation hubs.
The fintech wave that followed between 2018 and 2022 expanded rapidly. PayMaya – now rebranded as Maya – rolled out QR payments and digital banking features that helped it rank among global financial technology leaders.
Tonik Bank became Southeast Asia’s first fully digital-only bank in 2021 and reached hundreds of thousands of depositors within its first year. These players, along with Coins.ph and others, positioned the Philippines as a major market for digital finance in the region.
By 2023, venture capital funding into Philippine startups surged to nearly $960 million (approximately P53.4 billion), making up 13 percent of Southeast Asia’s total startup funding – double its share from just a year before.
Reports from global think tanks such as Startup Genome and StartupBlink placed Metro Manila among the world’s emerging tech hubs, albeit with cautionary notes about overcentralization and the need for regulatory clarity.
Government intervention has become more focused. The Innovative Startup Act and CREATE Law provided tax relief, funding access, and visa privileges for foreign startup workers.
The Startup Venture Fund, managed by the National Development Company, now allocates over P1 billion in co-investments for qualified Philippine startups.