FUNDING would not be a problem for Philippine startups if local business owners, who generally prefer to place their money in conservative instruments, invest in budding technology businesses.
Yobie Benjamin, US-based ClickSWITCH.com chief technology officer, pointed out that the country’s tycoons prefer to place their money in real estate, malls, and hotels among others, instead of putting some of their money in technology startups.
“There are a lot of rich people in this country, but where do they invest their money? In real estate,” Benjamin, in a press conference, said.
“It’s not a lack of capital, but lack of appetite for risk (among traditional business),” he added, comparing the funding appetite of Filipino business owners for startups with that of developed economies. He said that in more developed countries, there are a good number of venture capitalists investing in tech companies.
Recently, Forbes identified Henry Sy as the richest man in the Philippines for 10 years in a row, with a net worth amounting to $18 billion. The businessman owns SM malls and universal lender BDO Unibank. Meanwhile, John Gokongwei of Cebu Pacific, Robinsons Mall, and Robinsons Land is the second richest, with a net worth of $5.5 billion.
Generally, however, investing in tech startups is considered as a high-risk investment, with relatively small chances of succeeding. But when it does, it generates the biggest revenues.
For instance, Benjamin said four of the five richest businessmen in the world are involved in technology-- Bill Gates of Microsoft, Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, and Warren Buffet, who has invested in startups.
Meanwhile, business owners in the Philippines, according to Silicon Valley-based startup investor Jojo Flores, rarely tap talents and technologies outside their organizations to provide innovations in the company.
“They have to convince themselves and realize that we are in this new world. You’ve got to have the best thinking...we have to engage in startups because they think out of the box,” said Flores.
Speaking from his experience in the US, Flores, who is the co-founder of Plug and Play in Silicon Valley, said companies invest in startups and help big corporations find solutions to improve their business operations.
However, Butch Meily, president of Makati-based incubator QBO Innovation Hub, said some giant corporations in the Philippines, particularly local telcos, form incubators to hone and scale up tech startups.
Published in the SunStar Cebu newspaper on August 26, 2017.
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