Tech Startup CashCashPinoy Sees Opportunity in the Philippines

For tech startups in undersaturated market segments, like CashCashPinoy, operating in the Philippines is an opportunity. Although the operating environment is less than ideal in certain ways, expansion can be rapid and lucrative. “After launching in 2010, we have become one of the top three eCommerce sites in the Philippines,” says Frédéric Levy of CashCashPinoy. Because of its location along major trade routes between Asia, Europe, and North America, and its long, complicated history, operating in the Philippines is a challenge which may intimidate or overwhelm potential investors from overseas. “The Philippines is a country rich in culture tracing back hundreds of years. Today, the Spanish, American, Chinese, and Japanese influences form much of the people’s habits and attitudes,” wrote Phoebe Magdirila on TechInAsia.com. The domestic political scene can be another complicated factor in understanding the business climate. In addition to political dynasties allied with conglomerates, corruption is a problem in in the archipelago. In his latest Easter message to the nation, President Benigno Aquino vowed to step up his government’s efforts against corruption. “There will be even more corrupt [officials] who will be held accountable,” he said, in speaking about some recent successes in fighting corruption won by his administration. Beyond corruption, the developmental state of the Philippines as a nation often crowds out funding for other measures that could improve the business atmosphere in general. Also, this prevents the government from sponsoring initiatives that would help tech startups in particular. “The government can contribute to improving the startup ecosystem in the Philippines, especially in infrastructure. In addition, the government’s capacity to cope with innovation will help startups grow,” wrote Magdirilia, highlighting one of the points of contention for those working on business development in the country. The government could take a more active stance in regards to fostering development and startups. For example, rather than dispatching a consul or ambassador, Estonia’s President Toomas Hendrik Ilves himself attended the inauguration of the Estonia Pavilion at the Plug and Play Tech Center in Silicon Valley. Among the center’s previous clients are such notables as PayPal and Dropbox. “Skype provides over 2,000 jobs in Estonia. Simply put, I want more Skypes to come out of Estonia,” said President Ilves, highlighting his own country’s success in technology. “Being a startup in the Philippines is just like what I imagine a startup in Silicon Valley would be like except you get all the comforts and advantages stripped away,” Eric Su, co-founder and developer of PicLyf, a visual-content focused publishing platform for photo blogging, said to TheNextWeb.com. “Besides missing the obvious things like venture capital & angel investors, you are also missing a healthy pool of early adopters or people who support startups, as well as key hires with built-in technical expertise.” According to the World Startup Wiki, “As of March 2014, the Philippines has hardly any ‘local’ VC money beyond the seed stage. There have been 47 identified angel investors/venture capitalists that have made at least one investment in the Philippine tech startup scene.” In terms of startup accelerators, some companies have made substantial numbers of investments. Cebu InIT invested in the largest number, 24, while Ideaspace and Kickstart Ventures supported nineteen and seventeen, respectively. These three companies together account for approximately 80% of all venture capital investments in the Philippines. Although some deals are limited to office space and mentorship, some still offer cash funding. Kickstart Ventures in particular has recorded the largest amount in typical investment size at $100,000. Incubator and accelerator Ideaspace recently released a list of what it regards as the Philippines’ top twenty tech startups. Including CashCashPinoy and others, the grouping slants heavily towards applications in the health care sector and mobile platforms. After further evaluation, some of these companies will receive angel funding, up to $120,000 each. A nonprofit, the company reportedly has $12 million in reserve for investments over the next five years. As complicated as the tech sector can be and daunting as a startup can be, there is still reason for hope in the future of technology offered by the Filipino people to the world. “I happen to think the constraints help shape startups into something unlike the world has ever seen before if they are not killed by the harsh climate first,” said Su. Offering advice to potential entrepreneurs thinking of starting up their own company, Su went on to say, “Basically, plan everything around your survival first and foremost. This might mean bootstrapping, part-timing the startup or better if you can, bake the business model in so well that it’s profitable on day one. The only reliable sources of funding you can rely on here would be from your friends/family or customers.” Highlighting Filipino’s consumer culture and Manila’s “payday traffic” phenomenon, Frédéric Levy is optimistic about the future prospects of eCommerce platforms in the Philippines. “Tech in the Philippines is really taking off. Building a company in this country is very different from other countries, but it is very rewarding. The people here are very enterprising and are exciting to work with,” said Levy. “Sites like CashCashPinoy are uniquely situated to satisfy the demands of the Filipino market.” Samantha Nash contributed to this article.

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Tech Startup CashCashPinoy Sees Opportunity in the Philippines

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