Deal count and amounts raised plunge sharply year-over-year, with 57% of local founders saying startups “greatly lack” funding opportunities.
• Philippine startup funding plunged over 40% in 2023 as deals declined, dampening ecosystem.
• Local founder survey shows 57% feel startups lack funding chances amid uncertainties.
• While seed stage remains resilient, profit focus needed over expansion until stability returns.
Economic Uncertainties Cast a Shadow over the Philippine Startup Ecosystem
Funding for Philippine startups has declined sharply between 2022 and 2023, falling over 40% year-over-year alongside a 21% drop in deal count, according to a new report.
The findings come from VC firms Gobi-Core Philippine Fund and Alibaba, reflecting a weakening climate mirrored across Southeast Asia.
A survey of 33 local founders revealed that 57% feel startups lack funding opportunities. Entrepreneurs are very aware of the time needed to raise each funding round.
Government Initiatives Aim to Boost Startup Funding in the Philippines
While angels invested just 4 months after startups got started on average, it took 14 months to go from seed to Series A – a gap likely wider now.
Similar trends are playing out in Indonesia, with projections of an 80% funding deal value drop this year.
Macroeconomic uncertainty, rising interest rates, and weaker confidence levels are slowing fundraising momentum for Philippine startups.
Seed-Stage Funding Remains Relatively Resilient in the Philippines
However, the market retains strong fundamentals and demographics that could reignite activity when stability returns.
For now, entrepreneurs will need to focus on profitability over rapid expansion, with the average breakeven point taking 4 years locally.
Investors are also becoming more selective amid global headwinds.
