An avalanche of startup funds

An avalanche of startup funds

Summary: Just recently, the IT world saw two blockbuster deals involving startups: the US$200 million purchase of app builder OMGPOP by casual games company, Zynga; and the US$1 billion acquisition of mobile photo-sharing site Instagram by networking giant Facebook.Although it is important to note that these transactions occurred in the U.

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TOPICS: SMBs
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Just recently, the IT world saw two blockbuster deals involving startups: the US$200 million purchase of app builder OMGPOP by casual games company, Zynga; and the US$1 billion acquisition of mobile photo-sharing site Instagram by networking giant Facebook.

Although it is important to note that these transactions occurred in the U.S. involving American firms, it is also not farfetched that Filipino startups could be a target for acquisition. In fact, there were a few Filipino-owned software companies in the past that were gobbled up by big IT companies.

GlueCode Software, which was founded by Filipino open-source guru Winston Damarillo, was bought by tech behemoth IBM a few years ago. Big Blue also bought Tivoli Software, another startup co-founded by Peter Valdes.

Then there's Joey Gurango, who has built a reputation forming and running successful software companies. Prior to establishing his current company Gurango Software Corporation (GSC) in 2003, he founded Match Data Systems (MDS) in the US in the mid-1980s. Gurango would later on sell MDS to Great Plains Software, which was eventually acquired by Microsoft in 2001.

This long line of acquisitions only proves that Filipinos can create good software that can be deployed by the biggest IT companies in the world.

Thus, the recent announcements of availability of startup funds come as refreshing news to all local tech startups that have dreamt of making it big in the tech scene but lacked the resources to pursue that aspiration.

Among those which have allotted millions of pesos for technology startups are old telco rivals PLDT and Globe Telecom.

PLDT has set aside 500 million pesos for its IT incubator program called IdeaSpace. Manny V. Pangilinan, PLDT's big boss, told reporters in a recent table that initiative will be run like a competition where startups can pitch their ideas in order to get funding.

Globe Telecom, meanwhile, has formally organized a subsidiary dubbed Kickstart Ventures, although it did not divulged the amount of money it was putting out. The mobile operator may have been inspired by the good results churned out by Startup Weekend, an event it sponsored last year and which it vowed to support also for this year.

It's good to note that Globe's mother company, Ayala, is not new to this type of program as it has been incubating tech firms for more than a decade now at the UP-Ayala Techno Park in Quezon City.

Emerging as another major tech incubator is IT entrepreneur Myla Villanueva, who recently allocated US$2.5 million or about 111 million pesos to fund startup ventures.

Villanueva may have gotten the idea of forming an incubation program from her own experience after selling years ago her wireless broadband firm Meridien Telekoms to Smart Communications for a hefty US$50 million. Now, she heads a cluster of IT companies that include Novare Technologies, MDi, and Microwarehouse.

Also, representatives from a Silicon Valley-based organization arrived in the country early this month to commence a nationwide startup tech competition it launched in 2011.

Board members of the Science and Technology Advisory Council, Silicon Valley (STAC-Silicon Valley) recently kicked off ON3, an IT startup tech search and business plan competition conducted in various locations across Luzon, the Visayas, and Mindanao.

I’m not really sure what triggered all these startup activities, though it took quite a long time before these big players got into the scene. Nonetheless, it’s still a welcome development for hard-up but world-class Pinoy IT talents.

Topic: SMBs

Melvin G. Calimag

About Melvin G. Calimag

Melvin G. Calimag is currently the executive editor of an IT news website in the Philippines. Melvin has been covering the local IT beat for the last 13 years. He is currently a board member at the IT Journalists Association of the Philippines (CyberPress), and also serves as a charter member with the Philippine Science Journalists Association.

Joel D. Pinaroc

About Joel D. Pinaroc

Joel has been a media practitioner since 1996, starting off as a reporter and eventually becoming editor of a pioneering IT trade newspaper in Manila. He is currently one of the content producers of a Manila-based developmental website.

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