By Trefor Moss
MANILA-- Aisa Mijeno had her "eureka" moment one day in a remote
village in the Cordillera mountains of the Philippines' northern
Luzon province.
During a stint there as a volunteer, she would watch local
people trek nearly 50 kilometers along jagged paths to buy fuel for
kerosene lamps, their only source of light. Children would often
miss school to make the trip.
"That's when the SALt Lamp was born," Ms. Mijeno said. "My
vision was to solve this problem for the 16 million Filipinos who
have no access to electricity--those in the mountains, on small
islands, people off the grid."
Four years later, potential investors are lining up to back her
invention, a lamp that runs for eight hours powered by a single cup
of saltwater.
Ms. Mijeno's SALt Corp.--short for Sustainable Alternative
Lighting--is one of a number of promising Philippine startups, many
of which address the everyday challenges of people in developing
countries.
"The Philippines can become a leader in using technology to
address emerging-market problems," said Earl Valencia, president
and founder of the IdeaSpace Foundation, a Manila-based incubator
that has helped back Ms. Mijeno's lamp. "We just need a couple of
big successes. Then this will go ballistic."
Until recently, it was difficult for entrepreneurs like Ms.
Mijeno to get support for their ideas. The Philippines simply
didn't have a startup scene.
The turning point came in 2012, when two Philippine
telecommunication companies set up incubators--organizations that
foster startups--to breathe life into Manila's technology sector.
Smart Communications, a subsidiary of the Philippine Long Distance
Telephone Co., founded the nonprofit IdeaSpace. Kickstart Ventures,
which typically takes a 12% to 20% stake in the startups it funds,
was spun out of Ayala Corp. and SingTel-owned Globe Telecom
Inc.
Kickstart has invested in 20 startups so far, and is realistic
about its chances of sprouting the next Facebook Inc.
"The failure rate for startups is about 96%," said KickStart
founder and President Minnette Navarrete. Even so, Ms. Navarrete
said Philippine tech is poised for its first big breakthrough.
"We're just waiting for that first $100 million exit," she said,
referring to two successful endpoints for a tech startup: an
initial public offering or a buyout.
The country's first tech IPO took place in December, when Xurpas
Inc., a mobile content provider, raised $30 million on the local
exchange. But it took Xurpas 15 years to go public, and Ms.
Navarrete said the best of the city's new entrepreneurs would
likely do far better in a fraction of the time.
One of the 20 startups backed by Kickstart is Kalibrr, a "talent
marketplace" that connects companies with job seekers. It was
founded in 2012 by Paul Rivera, who formerly worked at Google Inc.
But he left his dream job in Silicon Valley in 2007 to return to
the Philippines--which he left at the age of five--to found a
startup.
"I thought, am I that crazy one that leaves Google?" he
recalled, as his initial ventures found mixed success. Back then,
Philippine startups faced a lonely struggle for survival, as they
lacked California's refined ecosystem of investors, venture
capitalists, cheerleaders and incubators, 32-year-old Mr. Rivera
said.
But once an ecosystem began to coalesce around the two new
incubators, everything started to click. Kalibrr received $100,000
from Kickstart for a 4% stake and then became the first Philippine
company to participate in the prestigious Y Combinator incubator
and investor program in Silicon Valley, raising $1.6 million in
second-round funding.
Now, with venture capitalists from Japan, Singapore and the U.S.
eyeing Philippine tech companies, expectations of local
entrepreneurs are higher than ever, Mr. Rivera said. "Filipino
startups used to be happy with a 1 million peso [$45,000] exit. I
want a $100 million exit."
Alongside Filipino returnees in Manila's cosmopolitan tech
community are foreign entrepreneurs who aim to use the youthful,
tech-savvy and English-speaking Philippines as a springboard to
jump into other emerging markets like India and Indonesia.
Among the Manila-based, foreigner-led startups following this
playbook are Lenddo, which uses social media to build credit scores
for people with no credit history--in the Philippines, about 80% of
people don't have bank accounts--enabling them to get bank loans
for the first time. And then there is mClinica, which provides
discounts on medicine via a network of 1,500 Philippine pharmacies,
while gathering market data for drug companies.
The best ideas, Mr. Valencia said, are coming from Filipinos
themselves, people who live with the country's problems on a daily
basis. In 2013, IdeaSpace started running a national contest to
find--and then fund--the most promising Filipino startups.
"The first year we were so scared, we thought there'd be 50
applicants," recalled Mr. Valencia. There were 600 entrants. This
year's contest drew more than 1,200. "We've been amazed by the
pent-up demand," he said.
Twenty-three shortlisted applicants from across the country
gathered in Manila in March for IdeaSpace's weeklong "boot
camp"--an intensive course giving aspiring entrepreneurs a complete
startup tool kit covering fundraising, valuation, branding, and
teambuilding. In May, IdeaSpace will select 10 final winners, which
each receive $50,000 in funding and the incubator's ongoing
support.
"Here, 90% of the things people develop are trying to address a
real problem," the 32-year-old Mr. Valencia said. He said Silicon
Valley favors gimmicky messaging apps or obscure cloud-computing
systems.
To address the problem of having no electricity, the 30-year-old
Ms. Mijeno adapted a basic high school chemistry experiment to
build and patent a device powerful enough to produce a bright and
durable light.
SALt Corp. has received about $125,000 in funding so far, she
said, and is receiving a steady stream of offers from venture
capitalists. She added that it is partnering with nongovernmental
organizations to help fund the lamp's distribution in poor
communities across the Philippines, where its anticipated $22 price
tag could be prohibitive, Ms. Mijeno said.
"Then India will be next," she said.
Write to Trefor Moss at Trefor.Moss@wsj.com
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