Startup founders in the Philippines are bracing for a tough year in terms of funding in 2024, prompting them to shift their focus toward achieving profitability. This insight emerges from a study conducted by Uniquecorn Strategies, a startup-centric communications firm, in collaboration with The Fourth Wall, a market research firm.
The report from Uniquecorn and The Fourth Wall reveals that the average optimism regarding funding opportunities scored 2.65 out of 5, indicating a cautious sentiment among founders.
Citing a report by Gobi-Core Philippine Fund, the study notes that the prevailing pessimism can be largely attributed to a substantial 40% decline in local startup investments in 2023. Founders express uncertainty regarding their company valuations for the year 2024.
Read:
Klook secures $210 million in funding
Packworks partners with financing firm to offer loan to ‘sari-sari’ stores
According to the report, “Founders’ average valuation assessment score for their own startups stands at 2.65 out of 5, suggesting expectations of lower valuations compared to 2023.”
“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,” said Dean Bernales, founder and CEO of Uniquecorn Strategies.
Prioritizing profitability over growth
In response to these challenging conditions, 75% of founders are now prioritizing profitability over growth, aiming to reduce dependency on investor funding. Over the next 12 months, 70% have identified profitability as their top priority, with improving customer experience and product development also ranking high at 55% each. A significant 55% of founders anticipate their startups becoming profitable within the next 1 to 2 years, and 20% claim to have already achieved this milestone.
The survey, co-presented by The Fourth Wall, Bossjob, and Launchgarage, underscores that startup founders acknowledge two critical external factors influencing their funding prospects: the Philippines’ economic growth performance and government investment regulations.
In evaluating government policies for startups, founders provided a middling rating of 2.45 out of 5. Also, 55% expressed an inability to identify any beneficial government policies, reflecting a negative perception of the government’s role in supporting the startup ecosystem.
Startup founders display moderate optimism about the country’s economic prospects, with an average outlook score of 3.40 out of 5. Those who launched their startups during the COVID-19 pandemic (2019-2020) exhibit the least optimism, likely influenced by the economic downturns and uncertainties of the pandemic, contributing to their cautious outlook.