In February, PwC published the Philippine Startup Survey, which showed promising data on the growth of startups in the Philippines. However, the disruption brought about by the COVID-19 pandemic caused major changes throughout the Philippine startup landscape. In light of this, PwC conducted a new survey with the Department of Trade and Industry, QBO, and IdeaSpace, with 90 founders from 12 to 26 April.
According to the survey, almost half of its respondents expressed great concern about the implications of the pandemic on their businesses. The most common concerns have been reducing operations, offering new products and services, implementing cost reductions, and preparing business continuity programs. However, 21% of founders said that the pandemic caused an increased demand for their services and products; which can be explained by the needs created as a result of the Enhanced Community Quarantine (ECQ).
Sectors that experienced growth include logistics, education technology, enterprise services, financial technology, and healthcare.
Philippine startups face a great amount of uncertainty moving forward, with the top three concerns of founders being related to funding and finances (financial impact, potential global recession, and funding difficulties, respectively). It has been challenging for startups to adjust to working remotely, especially given the nation’s challenges with internet speed; with 38% of founders citing this as the cause for a decline in productivity; however because technology is the backbone of these startups, 84% of founders expect to normalize operations six months from the lifting of the ECQ.
Despite this advantage, most say that they have a limited runway to sustain themselves financially, with 64% of the founders saying that they need up to PHP5M in additional funding to help normalize their operations.
They are hoping for government subsidies or grants, but without these, founders plan to look into securing the necessary funds through equity or bank financing.
Looking ahead given the current state of the country, the startup community alongside its investors are left to wait and see what happens next. Founders hope for government assistance, whether through loans, incentives like tax exemptions, or even modern public-private partnerships. To move forward and make their businesses sustainable in the new normal, founders shared that the most important forms of support that they would need include access to customers, talent, and consulting services.
To read more about the results of PwC’s startup survey in light of the COVID-19 situation in the Philippines, go to https://bit.ly/StartupSurvey-COVID19.