The country may have several infrastructural and regulatory hurdles to overcome, but it harbours great potential
Much has been said about Myanmar’s turbulent social and political upheavals. But with the country taking baby steps towards becoming more business-friendly, a new narrative has emerged — innovation.
Thanks to the uptake of internet usage, due, in large part, to the slashing of costs for SIM cards, Myanmarese are now seizing the opportunity to build their own startups.
Some have seen considerable success; for example, Myanmar-based mobile gaming developer My Play is set to be acquired by ASX-listed mobile and digital media solutions company iSentric for US$4.57 million. And last year, Myanmar also witnessed the launch of its first accelerator, Phandeeyar, last year. To date, it has graduated four startups.
Still, innovation remains sluggish compared to its neighbours such as Vietnam. Several key regulatory roadblocks for investors continue to plague the market. Singapore-based VC REAPRA, which has invested in 40 startups across Southeast Asia, however, is bullish about the market and is optimistic about investment opportunities.
In an email correspondence with e27, Vikram Bharati, who leads investments at REAPRA, spoke about why Myanmar, despite its slow growth, is an exciting place for tech innovations.
Here are the edited excerpts:
Myanmar’s tech ecosystem is still very nascent, some people have pointed out numerous archaic laws that plague the country, restricting investors from moving in. So for yourself, why are you still bullish about the country’s tech space?
What’s important to note is that Myanmar is undergoing fundamental change right now. The new government is determined to introduce reforms, the economy is expanding, and not only is there a quickly growing urban middle class – there is also a large, predominantly rural population who, for the most part, have smartphones and Internet access.
Many of those people are going online – but there’s currently a dearth of services and tech products available locally, and so most people end up spending all their online time on Facebook.
That’s precisely why REAPRA and Phandeeyar are really excited about the potential for technology in Myanmar – large demand for services and products specifically targeting Myanmar consumers across all strata of society.
As for regulation still falling behind other countries in the region in terms of being startup-friendly; we believe it is a matter of time until Myanmar gets up to speed. Currently, we see the majority of tech startups in Myanmar incorporating their businesses in Singapore, much like the startups elsewhere in the region.
Give me more insights about how Myanmar approaches tech innovation — what with its limited resources and limited exposure/collaboration opportunities with other tech ecosystems. What are the local entrepreneurs doing to circumvent these obstacles?
You will often hear that Myanmar is a nation of hackers! This is not untrue – Myanmar people are incredibly good at coming up with novel ways or finding solutions to problems. We think that’s a good start for a thriving ecosystem. But that’s not all it takes.
There are currently two important challenges: Scarcity of tech talent and scarcity of people with experience to massively scale tech products to serve a large population. The good thing is – as with entrepreneurs everywhere – the good startup founders find ways around this and are fast learners.
We see a lot of people in the community around Phandeeyar who have launched startups and have learned from their peers in the region, and globally, incredibly fast.
But we’d still like to see many more people dedicating themselves to build tech products for Myanmar, but it is even more important to proactively inspire the community of savvy aspiring entrepreneurs, by showing them how tech businesses are built in the region and around the world. There is so much to learn by looking at startups in Vietnam, Thailand, Indonesia, Malaysia and so on.
Besides funding, what can the regional tech ecosystem do to push innovations in Myanmar?
Funding is incredibly important; if entrepreneurs don’t get the fuel it takes to rapidly build their businesses, there is a risk of stifling innovation by not giving promising newcomers a fighting chance. Look at any thriving startup ecosystems in the world, and risk capital has been a key driver of growth in those markets.
However, there are of course more elements to successful innovation than just funding. Collaboration between tech companies, education programmes offered by leading universities in the region targeting the tech sector, as well as regulatory regimes that make market entry easier for startups would all contribute to the growth of not only Myanmar, but the entire startup ecosystem in Asia.
What tech verticals do you think investors or entrepreneurs in Myanmar should focus on at this stage?
REAPRA and Phandeeyar are incredibly excited about a new class of internet users rapidly adopting technology in Myanmar. Here’s a group of consumers – the majority of Myanmar’s 55-million people population, really – who bought their first phone maybe a year ago, and now have access to the Internet.
I think high-quality tech products and services targeting that segment can be hugely successful. Whether they are around consumer services, Agritech, financial services for the underbanked, there is a massive latent demand there.
Image Credit: lakhesis / 123RF Stock Photo
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The post Meet the VC: Why REAPRA is bullish about Myanmar despite its underdeveloped market appeared first on e27.