If there was one undeniable truth that emerged this funding winter, it is the power of addressing real-world problems. Ventures that thrive during downturns and withstand cost cuts are the ones solving genuine pain points and delivering unmistakable value to their communities.
At Wavemaker Partners, our investment thesis has always revolved around supporting entrepreneurs with unique solutions to real, compelling local problems in Southeast Asia, particularly in the domains of Enterprise/B2B, Deep Tech, and Sustainability. And in the Philippines, we’re not short of meaningful problems to solve. In fact, recent reports have shown that the Philippines is among the countries lagging in the United Nations Sustainable Development Goals (SDGs), including no poverty (SDG 1), zero hunger (SDG 2), and quality education (SDG 4).
We believe that technology companies arguably hold the most promise in bridging societal gaps through highly disruptive and defensible solutions that can be adopted at scale. That’s why over the years we have aimed to be more intentional about the impact our portfolio creates. Since 2012, we have raised four of Southeast Asia’s largest funds focused on B2B, Deep Tech, and Sustainability, with total capital commitments exceeding US$300 million. And we have made over 190 investments, including companies like eFishery, Indonesia’s newest unicorn, and Coins.ph in the Philippines (sold to Indonesian ride-hailing giant Gojek/GoTo in 2019). As part of our ESG efforts, we introduced a rigorous mapping process where we track the SDGs that our portfolio companies actively contribute to. We’re pleased to find that today, 86% of our nearly 150 active startups are contributing to at least one SDG. We also launched our maiden US$60M climate tech impact fund, Wavemaker Impact, which co-founds ventures with proven entrepreneurs to help significantly reduce the global carbon budget.
In the Philippines, here are some of our ventures that are making a difference in various SDGs:
Growsari – SDG 8 (decent work and economic growth)
There are over a million sari-sari stores in the Philippines, yet sadly these stores didn’t have direct access to FMCGs because they were too small to be bothered with. Growsari began in 2016 as an online ordering platform that aggregated sari-sari store orders to finally grant them direct access to wholesalers’ inventory and discounts. Fast forward to today, Growsari is a whole ecosystem, with its own logistics. Services have grown to include multiple microservices such as telco load and bills payment for the mom-and-pop stores, while providing access to loans to ease the stores’ working capital constraints. The company currently has over 2,000 employees and over 100,000 partner sari-sari stores, and has accumulated invaluable consumer market data they use to optimise and scale. It has successfully raised US$110 million in total funding from investors like KKR, International Finance Corp., and Pavilion Capital–the largest amount ever raised in the B2B space in the Philippines. To date, Growsari has created an estimate of around 3,000 jobs, including truckers, additional warehouse manpower, and agents that they indirectly employ.
Komunidad – SDG 13 (climate action)
Asia is one of the most disaster-prone regions in the world with thousands of climate disasters leading to a million deaths and trillions of dollars in reported economic damages in the past 50 years. Founded in 2019, Komunidad helps businesses, MSMEs, governments, and communities adapt to and mitigate the effects of climate change through localised climate risk analysis, natural disaster risk management, and automated sustainability data. With over 50 customers in the Philippines across sectors like energy, real estate, and education, the software company has grown its revenue 25x in the last two years and is expanding globally, particularly in Asia and Europe. Komunidad focuses on practical solutions to make businesses and communities more resilient to climate change. Its impact includes providing early warnings to over 50 million people and helping more than 300 businesses with sustainability management.
Lhoopa – SDG 11 (sustainable cities and communities)
Founded in 2017, Lhoopa addresses the affordable housing crisis in Southeast Asia, focusing on the acute issue of inadequate housing in urban Philippines. The company differentiates itself by targeting low-income housing, a sector often overlooked by traditional real estate developers. Lhoopa’s innovative approach involves identifying undervalued properties through data and algorithms, and collaborating with small contractors and partner sellers for rapid, cost-effective house development and sale especially in areas surrounding Metro Manila. Having sold over 3,000 homes in 50 cities to low-income families, Lhoopa has helped alleviate the housing shortage and contributed to sustainable development goals. Alongside the impact of providing affordable housing, Lhoopa has contributed to SDG 5 (gender equality) by improving the livelihood of its mostly female brokers (about 90%). Looking forward, Lhoopa aims to empower more small contractors and partner agents to deliver affordable housing across the country.
While the Philippines grapples with massive challenges, these do not deter us from being excited about the ecosystem. In fact, we are sincerely enthusiastic about the founders who can find solutions to these issues.
We recognise that the most meaningful problems may not always be the most glamorous or easiest to solve. Yet, it is precisely in tackling these challenges that enduring impact is made–both on the balance sheet and in the lives of people. Moreover, we do not require that solutions be trendy or have global comparables. As a matter of fact, we prefer founders building local companies that are not simply replicating famous startups from other parts of the world.
If you are an entrepreneur with unique insights seeking to make an impact, we invite you to join us in solving compelling local problems and working together to create a difference.
Edited by Jum Balea
(A version of this article was first published in the Philippine Venture Capital Report 2024 by Boston Consulting Group and Foxmont Capital Partners)
