If one can make it in New York, as Frank Sinatra once sang, that person can flourish anywhere. But for local startup companies, a millennial executive of a venture capital firm believes that their Big Apple is someplace else.
“If a local start-up can succeed in the Philippines, it can succeed anywhere,” Franco Varona, the 34-year-old managing partner of Foxmont Capital Partners, told Y2Z in an e-mail interview. “We believe that Philippine start-ups should simply focus their efforts and find success at home, and international recognition will soon follow.”
Foxmont Capital Partners is a multi-focus venture capital fund dedicated to supporting entrepreneurs in the Philippines with “capital, expertise, network, and through the different stages of growth.”
Varona said that while breaking through in a market with almost 110 million people and more than 7,000 islands poses an incredible challenge, especially during this time of a global pandemic, there is always an opportunity for growth. He pointed to the the Philippines’s diverse array of people, language and culture, as their group remains bullish on the local start-up environment.
“We have a very positive outlook,” Varona said. “Within our own portfolio companies, we are seeing lots of great new innovations for their businesses as driven by the pandemic. And we are seeing how quickly the industry as a whole is addressing the new challenges that we all face as we begin to settle into a new normal.”
According to Foxmont’s Venture Capital Report, start-up funding reached an estimated $183.8 million in the first half of 2020 alone, a whopping 384-percent increase from the 2019 year-round estimated value of $37.9 million. Meanwhile, the first half of 2020 raised record capital with just a little over half the number of deals as compared to the same period last year.
“I think this is a clear market indicator that as long as entrepreneurs show a strong business case to investors, there are many reasons to stay optimistic during the pandemic,” Varona said.
Foxmont is on the lookout for businesses and start-ups that have a solid revenue model and high potential to scale. Right now, those businesses are under the industries of fintech, e-commerce and health care.
As more people turn to online transactions including shopping and bills payment, the fintech sector accounted for over 80 percent of the total announced invested capital in start-ups. IT & Software and Transport and Logistics are also seen to grow drastically as compared to the previous years.
“However we do not limit ourselves,” Varona said. “We are open to look at businesses that are built to answer inherently Filipino problems.”
He added that to generate interest from any investor, Filipino entrepreneurs must build an excellent team, strive for operational excellence, prove the revenue model and show scalability. Foxmont’s portfolio include Edukasyon.ph, Kumu, and Booky, among others.
Varona studied in the United States before moving back to the Philippines in 2008 to start his professional career.
“I realized while in college in the USA that the biggest difference that I could make would be in the Philippines, where the start-up industry was still nascent,” he said. “I wanted to take everything I learned from my years of travel abroad and put it into something useful that others could learn from.”