PH startups brace for bleak funding scene

Philippine startups are wary of the funding environment this 2024, indicated by a low score in an optimism metric based on a new study.

According to the 2024 Philippine Startup Founders’ Outlook by local market research firm Uniquecorn Strategies, the average optimism outlook on funding opportunities had a score of 2.65 out of 5 based on the response of the 23 startup leaders that were part of the survey.Uniquecorn Strategies characterizes the score as pessimistic, attributing it largely to the sharp 40-percent decline in local startup investments last year as reported by local venture capital firm Core Philippine Fund.“The pandemic’s lingering economic impact continues to shape strategic decisions, with founders navigating a tightrope between growth aspirations and the harsh realities of funding,” says Uniquecorn Strategies founder and CEO Dean Bernales.

The poll, which was conducted from Nov. 15 to Dec. 15 last year, showed a lack of confidence among startup founders in their company valuations for 2024, says Uniquecorn Strategies.The average valuation assessment score in their own startups by the respondents was just 2.65 out of 5, according to the market research firm.Given these trends, 75 percent of founders are now prioritizing profitability over growth to reduce dependency on investor funding, the report notes.For the next 12 months, 70 percent of the respondents identified profitability as their top priority, while improving customer experience and product development were both cited by 55 percent.“While the immediate challenges in funding and valuation are evident, the founders’ focus on profitability and expansion indicates a proactive approach to navigating the complexities of the current economic climate,” Bernales says of the trend.Despite the bleak outlook, Uniquecorn Strategies says there is a silver lining, noting that a significant 55 percent of founders expect their startups to become profitable within the next one to two years.Further, 20 percent of the respondents have already achieved profitability, while 60 percent plan to expand to the international stage. INQ