Katalyst VC | Exclusive Interview




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Earlier this week, NewsBTC Philippines interviewed Katalyst’s Joe Maristela.
An angel investor in FinTech and Bitcoin related ventures.

 

NEWSBTC Philippines: What drove each of you to start Katalyst.ph?

It was a series of independent deals earlier in 2015 that led to us getting organized and putting together a structure around us to help us act on more opportunities in a more efficient way. I was in the Business Process Outsourcing business and have been for the past 5 years, not unlike Paul Rivera of Kalibrr — who also came from the BPO Business. But my BPO business doesn’t take outside accounts. Two deals came from being in this industry though. One was an offshoot of deals with me and my dad in California were already doing as accredited angel investors — in healthcare start-ups. Another solved a problem that almost all BPOs have: b2b remittances, and that’s where bitcoin came in.
Same with Pinky Natividad, another member of the Katalyst team. We were working together on events, and marketing projects. she came from an accounting/numbers background. It was a perfect fit, we saw opportunities and we didn’t just want to invest for profits. We have international backgrounds and we knew and felt deeply about the Philippines’ financial situation. Our work needs to address this, so we’re a practical business we do acknowledge the requirement of profits, but at the same time, we know that if that’s all we focus on: we’ll end up with the status quo: big banks that don’t care about the unbanked — otherwise they would’ve found a way to get them to get bank accounts, get credit, etc. (instead of loansharking—sorry to say), and we’d end up with an economy that was still mainly/mostly based on labor. which is what the Philippine economy’s essentially been based on. Labor. Not ideas. Labor. Not creativity or inventions. Just labor — with OFWs sending remittances to the PH, and manpower in manila to staff BPOs. That’s gotta change. So ‘Katalyst.ph’ is born of this ambition to be a catalyst for startups of change and progress, one of the first things that Pinky did as CEO of Katalyst was to quietly and slowly roll out a campaign called “forwardph” “ForwardPH”. You’ll see folks tagging “ForwardPH” with projects and initiatives that they might be working on at school. in their community. Doesn’t necessarily need to be a startup. Kind of like YouthHack—they try to get students to start thinking of entrepreneurship at an early age. Katalyst.ph and #ForwardPH — we’re trying to get founders to think about social impact at an early stage in their start-up.

In SF, a company called Salesforce is run/owned by Benioff, a partner with my family in healthcare. He’s donated clinical spaces, hospitals, etc. He requires of their applicants new hires and current employees to dedicate at least one day a week to community service because there’s an extreme income equality in San Francisco, actually it’s pretty disheartening to see actually. if you’ve got a heart, you’d feel pretty guilty. two blocks from Twitter HQ, there are drug addicts on the street just passed out on the curb. Benioff is an example of something Katalyst.ph aims to inspire and instill in founders in the PH. We already know all too well that greed’s overcome the PH for so long — and corruption … so it’s justified, to be wary of it, maybe even paranoid of greed, especially when there’re valuations such as GrabTaxi’s floating around

NEWSBTC Philippines: As a venture capital, what do you look for in start-ups before funding the team?

We obviously compartmentalize while trying to stay sympathetic and empathetic –need to keep an open mind as much as we can otherwise we might miss out on a great deal, but basically, hastily, we can throw pitches into a few bins. One bin is pure concept, no proof of concept, hardly any hardware or anything material to speak of. We’ve entertained pitches for apps without even a UI sketched up. kind of ridiculous, but again, we need to keep an open mind. Another in that early stage (pre-seed stage), is the proof of concept bin. They’ve got something that barely works, but they haven’t yet tested it in any kind of market. That’s all pre-seed money. If we were to invest in anything at those stages, we’d basically be acknowledging that we’re only investing in an idea and words from the person. We look to classify and categorize. The broader categories of course are pre-seed, seed, and marketing (pre-series A). We figure out where they are then there are two other bins that we use — super gross and general areas there. Either this thing is gonna monetize its way to revenues (which means that it’s gonna need a billion users) or it’s gonna be a premium service … if it’s a premium service, it’d better have a rich market … enterprise … and they’ve gotta have an account executive to be able to deal with managing enterprise accounts. Consumers facing premium service… those are almost always going to be more of the ‘monetize a billion users’ type of thing, ’cause either you price out your growth or you don’t have an efficient enough tech/platform/business model to bring prices down enough for there to be that growth. It’s all just a bunch of levers and switches that you have to adjust to see where/how the startup stacks up. During YouthHack Manila, we covered the idea of an addressable market and an obtainable market. The convention Katalyst.ph workshop folks mentioned to the YouthHack class is usually 1% at most. If you go to Y Combinator for example, and you pitch to them, and you say your addressable market is the $20b market of remittances flowing to the Philippines. IF they agree with you on that (huge “if” there), they’ll only ever assume as much as 1%, and that’s your max potential. As an investor that’s just a #defensemechanism.

 

NewsBTC Philippines: What can we expect from Katalyst.ph in the future?

Katalyst is basically doing a deal a month. Our evaluation team has a huge pool of startups but honestly most of them are very very rough. Katalyst was on ANC the other day,. if you can find the vid, we’re there and we talk about how the Philippines will invariably yield its first billion dollar startup … invariably #unicorn. For all the same reasons that the BPO industry’s done so well here — cultural compatibility; work ethic; demographics of our working population — the startup scene out here will do better.

NewsBTC Philippines: Alright, here’s our last question. What is Katalyst’s direct connection with Bitcoin?

Well Katalyst.ph’s angel investor Joe Maristela is leading sci.ph’s seed round, and they’re continuing to evaluate FinTech businesses, because of what we mentioned… big banks — they’ve been there so long. Status quo right, nothing’s going to change. Not any time soon anyway, so investment in new FinTech companies is the only way. Something like Rebit.ph. Biggest remittance service based on bitcoin in the world. They do $20m/year in remittances, and they’re a just a year old. SCI.PH owns that. Its growth is crazy, and that’s just remittances.

LINKS:
https://www.kalibrr.com
https://www.sci.ph
https://www.rebit.ph
https://www.katalyst.ph

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