COMPANY
Buko Ventures Community,
We started Buko Ventures almost one year ago with the goal of supporting early stage startups in the Philippines. With a combined 25 years of experience in the Philippines tech sector, we’ve seen proven growth in certain areas, like social media adoption and overall e-commerce growth, but also huge untapped opportunities for tech startups to add value to the Philippines economy. Relative to Singapore and Indonesia, the Philippines startup sector has been slower to take off, and we wanted to play a part in helping to change this.
It was with this in mind that we started Buko Ventures in early 2021. We started with initial capital from the co-founding partners, and then quickly received further commitments from other friends in the tech community in the Philippines, and then additional commitments from friends and investors around the world.
One of the initial insights that prompted us to start Buko is that relatively small check sizes of $5-$10k can, in the Philippines, already give early stage founders significant resources and runway to build an MVP and/or accelerate their early growth. This enables us to support a significant number of teams building impactful businesses with a relatively small total fund size.
Buko Ventures Performance to Date & Key Highlights
In less than a year, we’ve invested in 14 startups across a wide range of sectors from DTC e-commerce, to logistics aggregators, to esports platforms, to content newsletters. Some of these teams have already gone on to raise significant follow-on rounds at significant valuations. At latest valuations, Buko Ventures Fund I has seen a 10x increase in value in less than a year and Buko Ventures portfolio companies have raised over $5m in additional funding after our investments. We have benefited by investing early in strong projects and providing additional support and guidance to the teams.
Across the 14 investments to date, here are some of the key stats:
- Buko portfolio companies have raised over $5m after our investments
- Portfolio holding value have increased approximately 10x on invested capital to date
- 2 portfolio companies invited to participate in Iterative, and 2 in Accelerating Asia - both are top startup accelerator programs in Southeast Asia modeled on Y Combinator.
- 13/14 founding teams are Filipino
- 6/14 portfolio companies have female foundersHere is the full list of Buko Ventures portfolio:
BUKO VENTURES PORTFOLIO
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AcadArena: “Play-to-Grad” esports and crypto gaming platform
BackScoop: Southeast Asia tech-focused content newsletter & community platform
Betterteam: Employee retention analytics SaaS for HR teams & BPOs
Chatgenie: Chat-based e-commerce SaaS
Cocotel: Tech-enabled hotel brand and booking technology for SME hotels
DumDum: Ecommerce for K-Pop/K-Drama korean culture products
Forent: Marketplace for rentals for products, services, and equipment
Interleukin: B2B healthcare supply chain e-commerce marketplace
Mayani: B2B & B2C marketplace for agriculture products in the Philippines
Meetbit: Seamless scheduling and calendar optimization SaaS for teams
Podcast Network Asia: Podcast studio & podcast management SaaS
Shipmates: Logistics platform connecting businesses to delivery logistics providers
Tempo: DTC female-health products brand
Twala: Identity management and e-signature SaaS for Philippines legal requirements
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You can read more about our investments on our substack newsletter where we post a brief introduction on the thinking behind each investment.
Selected portfolio company highlights:
Highlight on AcadArena:
Acadarena is an esports platform for students in the Philippines that has developed into a leading web3 crypto-gaming platform for student-age gamers in the Philippines and soon around the world.
During 2021, the Philippines emerged as a surprise pioneer market for crypto gaming, particularly driven by Axie Infinity, which grew to be one of the largest crypto projects in the world with millions of players and billions of dollars worth of transactions for in-game spending. During the explosive growth phase in 2021, as much as 50% of Axie players were in the Philippines and Axie Infinity earnings were actually an important source of income for families during the pandemic lockdowns (there is an interesting short documentary on Filipino Axie Infinity players here). This led to a big growth of web3 gaming and metaverse-related startups in Southeast Asia and in the Philippines in particular and AcadArena is a proud member of this pioneering web3 gaming ecosystem. Buko Ventures was the first investor in AcadArena in May 2021. In October they raised a strong $3.5m seed round from top crypto VCs as well as an impressive group of angel investors (you can read about the fundraise here).
AcadArena has an exciting roadmap going forward bridging the gap between web2 and web3 gaming with a clear focus on school-aged gamers in the Philippines and around the world.
We asked the AcadArena team to share feedback on his experience with Buko Ventures. “The Buko guys were incredibly helpful to us when we were starting out. They went above and beyond when it came to helping us navigate the startup space as first time founders -- you could even say they were part of our team as a whole. We wouldn't be where we are today without them” - Justin, COO, AcadArena. It’s great to hear this positive feedback and Justin and the AcadAreba team have introduced other founders to Buko Ventures as well which we really appreciate.
Support for Portfolio Teams
In addition to the invested capital, we try to provide a lot of support to the founding teams. Depending on each team’s specific needs, we help with product feedback, product design sprints, revenue monetization strategies, financial modeling, investor and business development introductions, pitch deck feedback, and various other miscellaneous topics that come up for early-stage startups.
We generally have a monthly or bi-monthly call with each team and a whatsapp or telegram groupchat for quick feedback. We’ve tried to create a fund culture that is high-energy, responsive, but also informal so that founders are comfortable to ask any questions and treat us more as partners and mentors than as high-pressure investors. This approach seems to be appreciated and we’ve had a lot of founders reach out to us for funding after hearing positive recommendations from existing Buko portfolio founders.
We view Buko Ventures as being an important bridge and enabler between the earliest days of a new venture and the first milestones that help attract solid early-stage venture capital investors. We’re excited to know that a number of the top venture funds in Southeast Asia follow our investments closely and have expressed interest in supporting Buko Ventures companies as they reach the Seed and Series A stages.
Among the Buko Ventures team, we’ve gone through hundreds of investor pitches and know many of the VCs around Southeast Asia. We are able to share helpful advice and guidance for founders going through their first fundraisings to help them achieve a good outcome.
Big Recent Rounds in the Philippines
With Buko Ventures, we’re focused on supporting new founders at the earliest stages of launching new businesses. The Philippines tech sector has also been missing a strong track record of bigger later-stage funding rounds to really scale up. Up until recently, most Philippines venture rounds were only in the $1m to $5m range. This is now changing. In October 2021, Kumu, a Filipino livestreaming social media app, raised $74m in Series C funding led by General Atlantic. In January 2022, Growsari, a Filipino B2B supply-chain e-commerce company, raised $45m in Series C funding led by KKR. And in February 2022, Tonik, a neobank in the Philippines, raised $131m in a big Series B led by Mizuho Bank in Japan. Additionally in February 2022, PDAX, a leading Philippines crypto-currency exchange, raised $50m from Tiger Global.
These big raises help to drive the Philippines tech sector forward and will attract more investor interest into the Philippines, which we’ve been seeing already. It can also help to gradually attract more of the thousands of talented Filipinos working in the tech sector overseas to return to the Philippines to launch new businesses, which has been a major dynamic driving the growth of the Indonesian tech sector in the last decade.
Summary
Overall, the fund has gone better than we initially expected both in terms of the impact on the startup community and in terms of the financial performance (at least based on unrealized gains on current valuations thus far). We are very excited to continue supporting our portfolio companies and also to make new investments to expand the Buko community.
We’ve also received a lot of interest from investors that would like to invest in Buko Ventures. For now, Fund I is already fully oversubscribed but we are exploring the potential of launching a larger Fund II.
