Helping Investors Help Startups

JAMES LETTE Executive Director Manila Angel Investors Network Prior to becoming MAIN’s executive Director, James has had 25 years of experience working with international organizations and private companies all over Asia, Europe, the South Pacific, Africa and Australia.

What are your observations on how investor participation has changed over the past 5 years? What are trends that you are experiencing?

We believe that investors have always been willing to back the Philippines, it was a matter of not knowing how to identify the best opportunities from the pack or get a seat at the table to make a deal. MAIN now provides that avenue. The fact that in a short time, MAIN has grown from a handful of people to a large group investing over USD 1 million annually, clearly demonstrates how the Philippines investor and startup ecosystem has developed.The Philippines is a massive market – with almost 110 million people and a growing middle class. It’s globally connected with an enormous Filipino diaspora. It is also a digitally savvy nation. Some say it’s the social media capital of the world, and the mobile texting capital of the world. However, the Philippines is a market that has yet to be largely disrupted by tech. This context is very attractive for startups – and presents a significant opportunity for investors. It’s clear that fintech will continue to be the fastest-growing tech sector in the Philippines. The huge amount of remittances coming into the country every year is a strength that can be built upon. The moment local startups solve the problem concerning the unbanked and the inconveniences in the financial services industry, they have a solution that can be scaled globally.There are also opportunities to be found in other sectors. For example, with the COVID-driven global realization that professional jobs no longer need to be tied to geography, the country’s strengths in outsourcing, talent and tech will provide myriad new opportunities here. MAIN is constantly looking for these, screening the investability of hundreds of startups each year, presenting the best to its members.

How would you describe the developments in investment opportunities?

The Philippines is an earlier stage ecosystem compared to other countries in the ASEAN region. However, this presents an opportunity for investors, where realistic valuations can be found in a market that pre-COVID was on the cusp of explosive growth. It is also a market that has had a shortage of local tech success stories although, this is changing.

From your perspective, how has the investment environment been affected by Covid-19 and what could it mean for our investors?

Investors are still looking to deploy capital into the Philippines for those opportunities they believe in. Until more certainty returns about the wider economic ramifications of COVID-19, those sectors which are considered investable has narrowed, and the investments’ path to profitability needs to be clear. Despite COVID, several of our portfolio still managed to close their Series A rounds, including Kumu and Qwikwire. MAIN also syndicated investments into two new investments in July 2020.

What does the Philippines need to take the startup investing ecosystem to the next level?

Anything that will help startups to succeed will in turn benefit investors. As such, initiatives to improve the ease of doing business in the Philippines are key. Many of the other actions needed to help the Philippines ecosystem are addressed in the recent ‘Innovative Startup Act’. A key aspect of this law are initiatives which will develop the pipeline of investable startups – the Startup Grant Fund and the Startup Venture Fund.