PwC shares what investors look for in a winning startup

As the Philippine business landscape continues to shift, how are the country’s top investors assessing the startups leading innovation in the region? And how can both groups strengthen their partnerships for mutual gain?

Here are five trends in investor interest from the PwC Philippine Startup Survey 2020.

1. People are the top consideration for entering partnerships…

More than any business model canvas or winning USP, it’s the people behind a startup that investors look at most. In PwC’s startup survey, 71% of respondents claimed that they regard a startup’s founding members above all other factors. The startup’s business model comes in second at 55%, while its scalability is in third place with 45%.

2. … as well as backing out of them.

As much an organization’s people is the top consideration for an investor, this also holds true for bowing out. Of the 84% of investors who have walked away from potential partnerships, 58% and 46% cited mismatch of personalities with the management team and weak management as their reasons, respectively. Lack of market traction comes in third at 42%.

3. Fintech wins in terms of investments and expectations.

Investors clearly have high hopes for fintech: they plan to invest in the sector the most for the next three years, seeing it as the most successful one industry in the next two years. High hopes are likewise staked on e-commerce and healthcare.

4. Improving teams and products are key to growth and innovation.

As more and more startups enter the playing field here and abroad, investors advise that innovation zoom in on technology, products and services, and business model. These will help develop the distinct and competitive solutions investors are looking for.

In terms of growth strategies, startups should prioritize talent acquisition, improvement of existing products and solutions, and expansion beyond the Philippine market.

5. Entering markets with high M&A activity may benefit startups.

While both startups and investors agree that entering new markets in the next five years is a good move, they have different ideas on which ones to work on. Investors prefer Vietnam, Indonesia, and Singapore over Malaysia and other areas in the Philippines. This is likely due to the high number of mergers and acquisitions in these countries.