What it truly takes to become a Filipino unicorn

Cover art Samantha Gonzales with Freepik

Words by

Digital Reporter

Just how much should your company be valued for it to be considered a unicorn?

One billion dollars. That’s right, not pesos. Not dong. $1,000,000,000. My bank account is shookt.

How do you know if your startup has the potential to be worth a billion dollars? “Simple ways to determine the value of an idea is that if it solves a big problem where customers will be dependent on your idea, has an extreme organic growth through word‑of‑mouth or referral, if customers are willing to pay for it, and if it’s disrupting an industry,” said Carmina Bayombong, the 24‑year‑old CEO of social enterprise InvestEd during her talk at Spark Series x Far Eastern University: an event powered by BusinessWorld, co‑presented by Accenture and Voyager Innovations, Inc. together with ZALORAWingstop PhilippinesParkland and JobStreet.com Philippines, and supported by IdeaSpace Philippines and Philippine Junior Marketing Association | PJMA, with media partners Philippine Star and Bloomberg TV Philippines (you can breathe now).

For example: Facebook when it first started. You weren’t paid to join Facebook. You, like Bayombong, were probably convinced by a friend to join this new social media platform. That’s an example of organic growth. Now you can’t get away from Facebook, (you’re probably reading SparkUp on it right now), which is an example of customer dependence. Everything is on Facebook right now, it’s hard to imagine life without it. You can talk to almost anyone through it, you can buy almost any good or service through it. It’s definitely disruptive. Are customers willing to pay for it? Yes, that’s why there’s a lot of paid ads or sponsored content on Facebook.

There are a lot of unicorn the world over. Other examples given by Bayombong include Amazon, Pinterest and Uber. Asian startups include Traveloka, Lazada and Grab.

What about the Philippines? Is there such a thing as Filipino unicorn? Not yet, according to Bayombong.

Wait, there might be some confusion here. In October last year, news came out announcing Revolution Precrafted, a developer of prefabricated designer homes, as the first local startup to attain the title, following a series B round investment co‑led by Singapore‑based K2 VC, which valued the company at over $1 billion.

But according to Bayombong the company can’t be called a unicorn since it was merely the investment that catapulted its value.

“If you talk to venture capitalists in the Philippines, there’s really no unicorn yet. Although that’s the first startup valued [at more than $1], that’s just based on one investor that set it at $1 billion, but right now if you would really valuate it based on revenues, it’s not a unicorn,” she explained.

The value of a startup is based on its exit through an initial public offering (IPO), after which it ceases to be a startup (“graduate na siya,” as Bayombong put it). The largest exit by a Filipino startup so far is $40,000,000, which is a few zeroes away from being a unicorn.

Is there a potential for a unicorn to emerge from the Philippines? “Yes, of course,” Bayombong said. “I really want you to have the standards of a unicorn, build your business with the standard of a unicorn by bringing great value to your stakeholders. Start as soon as possible. Nothing beats experience in actually doing the business yourself.”

But she didn’t mean starting haphazardly. “Never leave your day job until you have the money to sustain yourself,” Bayombong added, noting that startup founders in Silicon Valley made sure to never leave their day jobs until they were sure that they earned enough from their startups to sustain themselves.

With that said, she advised that you shouldn’t get too bogged down with finances. “If you build a product that has great value, people will pay for it and you won’t have problems with funding,” said Bayombong.

As for Bayombong, she resigned from her first job to put up InvestEd which makes student loans and scholarships more accessible to college students. InvestEd currently gets funding from Villgro, an Indian social enterprise impact investor and incubator that recently branched out its operations to the Philippines and Kenya.

“InvestEd started when I was a student in UP, where I witnessed a lot of my friends drop out due to financial problems,” she recalled. “That got me thinking why is financial aid in education such a hard thing to come by?”

Bayombong, like many other startup founders, hopes that InvestEd will eventually scale to become a Filipino unicorn while being able to help several students finish their college education. But she’s in no great hurry. “I’m dreaming for my startup to be a unicorn pero pacing lang,” she said.