Phl startups aim to penetrate foreign markets

MANILA, Philippines — Most local startups are planning to enter new foreign markets and hold an initial public offering, underscoring the positive outlook of these young companies, according to a survey.

Based on the 2017 Philippine Startup Survey, 95 percent of these startups said they are planning to enter new territories in the next five years to grow their businesses.

The study, conducted by Isla Lipana &Co or PwC Philippines, surveyed 106 startup founders, providing a snapshot of the local ecosystem comprised of more than 200 active young companies. 

Of the number of young companies planning to conquer new markets, 56 percent said they also want to expand to other areas in the country.

Apart from other areas in the Philippines,  startups are also looking at penetrating other countries in the region such as Indonesia, Thailand, Malaysia, Vietnam, Singapore and Myanmar for their expansion plans.

The survey also showed 94 percent of startups are planning to welcome an investor in the next three years. It  also indicated that 63 percent of these young companies  are planning to hold an IPO in the next five to seven years to support  growth.

PwC Philippines chair and senior partner Alexander Cabrera said it would be helpful if the government would come up with legislation to support the startups. “In order for this ecosystem to be more vibrant for startups, the government should push for a  legislation that would support these young companies,” he said.

QBO Philippines and IdeaSpace Foundation Inc. president Butch Meily said he is hopeful the insights provided by the report would enable the government and private sector to continue to work together to support local entrepreneurs.

In terms of financing, the survey showed 47 percent of the startups are planning to raise less than $1 million in the next three to five years while 27 percent intend to raise between $1 million and $3 million. Primary uses for the funds are product development (39 percent), marketing initiatives (29 percent) and greater access to capital (55 percent).

A significant number of these startups cited the following as top challenges in their operations: capital requirements (88 percent), regulatory requirements (54 percent), and general economic/business conditions (50 percent).

To build sustainable businesses, more than half of the respondents said areas that needed improvement included tax incentives, ease of doing business and access to capital.