In the ever-evolving world of startups, where the quest for unicorn status — startups valued at over a billion dollars — reigns supreme, a quiet yet significant development is unfolding. In the current investment climate, there is a notable shift away from solely chasing unicorns. Investors and industry leaders have started to focus on startups, prioritising profitability and scalability over unicorn status.
The recent ‘funding winter,’ evident in Southeast Asia’s lowest quarterly funding in five years, has prompted a re-evaluation of how startup growth is measured. The Philippines isn’t insulated from winter, as the country has also seen a 40 per cent decline in funding in 2023.
In this landscape, high-value startups are pondering the question, “What lies beyond achieving unicorn status?” For these companies, the goal extends beyond reaching a US$1 billion valuation; it entails building a resilient, viable, and profitable business model that places a strong emphasis on impact and the tangible benefits it delivers to consumers.
With a growing emphasis on impact, sustainability, and profitability, how will this reshape the startup ecosystem?
It starts and ends with impact
At the core of our business, we believe that startups are created to solve a need. In Southeast Asia, there is rich diversity across the region, but even with the market differences, there are also shared challenges. These include the need to accelerate digitalisation across its populations and various industries in order to foster innovation and continue the region’s growth, according to a January 2023 paper from the International Monetary Fund.
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In addition, the IMF sees digital inclusion as extremely crucial in the region, with nearly half of SMEs face significant barriers in technology adoption and around a quarter of the population still have little-to-no access to digital services.
As part of the Globe Group and the company’s journey from telco to techco, we take these challenges into account to ground our startups on impact-driven insights that will allow us to create opportunities for digital inclusion. We keep this in mind as we work towards building more scalable, profitable, and sustainable businesses.
With how fast the landscape is changing, it’s important for startups to be agile and resilient–to be able to pivot when necessary but still keep impact at the core of every decision. At 917Ventures, this translates to aligning all ventures we build with a singular mission: uplifting the lives of Filipinos–be they individuals, businesses, or communities.
We recognise that impact goes beyond profitability and that true sustainability involves creating businesses that not only endure challenges but actively contribute to a better, more sustainable future.
Venture building vs venture capital
As a venture builder, the funding winter affects us differently–in that, we do not necessarily focus on fundraising, but rather, we channel our efforts towards generating more impactful ideas that can help the industries that we support to be more cost-effective and empowered through our digital solutions products.
We do this alongside conducting thorough assessments on profitability and strategically navigating challenging environments. The 917Ventures mindset centres on crafting digital solutions addressing everyday challenges for Filipinos, emphasising sustainability. With a track record of vetting over 900 ideas, scaling dozens of ventures, and managing a portfolio of 13 startups, our focus extends beyond aspiring to create the next unicorn.
Being in the industry that we are in, there are times when tough decisions like rejecting ideas or scaling back ventures become necessary. This is an unfortunate cost of innovation—recognising when a venture has already reached saturation point and no longer aligns with market demands.
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There is loss incurred, yes, but the lessons we take with us from these tough decisions equip our future strategies and in-house entrepreneurs (venture builders) — many of which are still young–with strengthened skills in resource reallocation and overall business resilience.
Risks are worth taking, especially when they pay off – proven by our startups that have emerged as industry juggernauts—with many on their way to doing so, as well.
GCash, for one, has grown into the Philippines’ only duacorn and has become the vehicle for digital transformation in the country through its inclusive financial solutions to more than 95 million Filipinos around the world. Our fintech solution has given more Filipinos access to banking services, digital payments, and insurance–effectively democratising access to financial services for a country where 30 per cent of adults still do not have formal bank accounts as a July report noted that the Bangko Sentral ng Pilipinas (Philippine Central Bank) predicts that 70 per cent adult Filipinos have formal bank accounts by end-2023.
Several of our other startups have also begun making waves–particularly RUSH and KodeGo, our e-commerce and brand loyalty platform and edutech solution, respectively. RUSH has supported almost 2,000 merchants nationwide in their digital transformation journey, helping their businesses build digital payment gateways and create strong customer relations.
Meanwhile, KodeGo is on its way to successfully graduating over 2,000 students by the end of December 2023–many of which are women–playing a key role in addressing the advanced digital skills gap in the country with their study-now-pay-later scheme.
These are just two of our ventures that we are seeing make headway in truly empowering local entrepreneurs and professionals in their digitisation journey.
At length, the long-term success of startups is increasingly intertwined with their ability to create positive change. Impact-driven strategies not only boost a startup’s reputation but also cultivate a resilient and adaptable business model. Prioritising impact becomes a strategic imperative as startups navigate the dynamic business landscape, contributing to sustained profitability, growth, and enduring success.
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