Pinoy startups face funding scarcity

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Filipino startup founders are faced with a pessimistic funding environment this year due to the sharp 40 percent decline in local startup investments in 2023 and these founders’ lack of confidence in their company valuations.

A study titled 2024 Philippine Startup Founders’ Outlook conducted by Uniquecorn and The Fourth Wall showed the average optimism outlook on funding opportunities scoring 2.65 out of 5.

Founders’ average valuation assessment score with their own startups stands at 2.65 out of 5, indicating expectations of lower valuations compared to 2023.

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Given these conditions, 75 percent of founders are now prioritizing profitability over growth to reduce dependency on investor funding.

For the next 12 months, 70 percent have identified profitability as their top priority.

Improving customer experience and product development are also high on the agenda, garnering 55 percent of responses each.

Founders also weighed in on how helpful current government policies are for startups, rating them at a middling 2.45 out of 5. Notably, 55 percent say they could not identify any beneficial government policies.

When asked what the government could do to improve the funding environment, 70 percent of the founders suggested an increase in investment in digital infrastructure.

Startup founders are moderately optimistic about the country’s economic prospects, with an average outlook score of 3.40 out of 5.

While profitability remains a significant concern for 55 percent of them, raising funds is a close second at 50 percent and 40 percent struggle with talent acquisition.

A significant 55 percent of founders expect their startups to become profitable within the next 1 to 2 years.

Around 20 percent of the respondents said they have already achieved it.

A majority of Filipino startup founders are setting their sights on international expansion, with 60 percent of them particularly looking at neighboring countries in Southeast Asia as a new geographic market.

 

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