How We Helped RISE Accelerate Internet Access for the Philippines

What a modest investment in a mission-driven ISP can do for connectivity in a frontier market

by Jim Forster

Connectivity is arguably the biggest impact driver of the 21st century. One of the most surefire ways to reduce inequality globally is to make sure that affordable, reliable, and high-speed Internet reaches every community in the world.

But what is the best strategy for investing in connectivity? At Connectivity Capital, we focus on getting the right capital to the right providers at the right time. Catching an ISP with a big, creative idea at a critical leverage point can drive massive impact.

That was the story with RISE. In 2021, we made a pivotal investment in RISE Internet in the Philippines, catalyzing the growth of an independent, carrier-neutral Internet Exchange Point. Fast-forward two years, and this strategic move has reshaped the connectivity landscape within the nation. It has changed the cost dynamic, paving the way for hyperscalers and global content networks to locate their equipment within Philippine data centers in a way that was previously not feasible. This transformative shift has redefined the business paradigm. Now, incumbent telcos are witnessing a surge in data center rental demand from international giants. Simultaneously, the demand for international sea cable capacity has transitioned from smaller, dependent ISPs to global content providers. This shift ensures that incumbent telcos still enjoy amplified revenues, all while significantly enhancing broadband affordability; a win-win scenario.

The Philippines: A Stark Digital Divide

The Philippines has seen tremendous growth in internet usage since 1994, when the first connection went live – but the digital divide in the country is still strong.

From 2010 to 2020, the number of internet users in the Philippines nearly doubled, from 27% to 52%, and the country tops the world in Internet usage . But according to the Internet Poverty Index , 20% of the Philippine population are considered “internet poor”, meaning they can not even afford a paltry minimum package of 1GB/month mobile internet. That’s the highest rate in Southeast Asia.

The numbers are stark. The average download speeds in the wealthiest cities are up to 21 mbps faster than the average speeds in the poorest, rural cities. At the last mile (people living more than 2km from a major road network), only 15% of people have access to sufficient internet speeds and only 9.5 percent live within the serviceable scope of cell towers.

RISE: Accelerating Internet Access for The Philippines

When we first met the team at RISE , we were impressed with their model. RISE launched in 2015 as a high-speed fiber ISP to provide a reference brand of how to apply technology to achieve a high quality service level. The objective here was to shift the benchmarks of what was possible within the Philippines and to then make those technologies available to the other telcos in a collaborative manner. – their mission is to “accelerate” Internet for the Philippines.

 But perhaps most importantly, they made an important early strategic decision in 2018, to launch and operate GetaFIX – the first carrier-neutral commercially run Exchange Point (IXP) in the Philippines.

Internet exchanges are an integral part of the structure of the internet, allowing Internet Service Providers to directly connect to other networks. These exchanges have been proven to significantly increase the quality of internet connections, as well as allowing ISPs to save on the costs of transit. Originally, they helped keep local Internet traffic local and this saved money by allowing ISPs to peer with each other by advertising their routes and exchanging traffic.

RISE’s big idea with GetaFIX was to make it a shared, carrier-neutral IXP, with high capacity, low latency, direct access to CDNs and Caches, and thereby bring the content closer to the member ISPs.  Members can connect at any one of the seven data centers in Manila.

RISE explains on their blog :

GetaFIX runs on the philosophy that “when we share, everyone wins.” It is hoped that if ISPs and content providers can come together within GetaFIX, the exchange can create the ‘network effect’ – attracting an even wider variety of service providers and CDNs for the benefit of the entire country.

As each new member connects, there is largely no additional work required by the existing members in order to start exchanging traffic and gaining the benefits. As GetaFIX grows, the internet exchange can substantially reduce the cost of providing services to the larger part of internet providers in the Philippines.

Or as they put it elsewhere: “A fair and equal playing field in this respect is vital for a healthy internet exchange ecosystem, as it encourages all players to come together to achieve better outcomes for all.”

Connectivity Capital’s Investment

In 2021, we made an initial working capital loan of $800,000 to the RISE team. This loan came at a critical time, as it helped them purchase much-needed capital equipment - that supported the rapidly growing capacities required to enable the ISPs in the Philippines..

Without these systems, the staggering traffic growth—doubling in just the last six months—wouldn't have been feasible. This surge is largely driven by major hyperscalers and content providers eager to localize their equipment within Philippine data centers, reducing their reliance on Hong Kong for services.

As a result, GetaFIX's traffic now exceeds 300 Gbps. This has transformed the economic landscape, shifting the financial burden from ISPs paying for capacity to content providers subsidizing international sea cable routes. In the end, this allows ISPs to benefit from reduced costs, while sea cable owners maintain or even increase their revenue.

At Connectivity Capital, we believe that investing is about more than crunching numbers; it’s about finding motivated, mission-driven entrepreneurs who have a bigger vision and the right connections to make a difference. That’s what we saw in RISE, and it’s what we’re looking for in other investments. Reach out…

Jim Forster is General Partner at Connectivity Capital