The country is high risk, high return’ for the start-up

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After decades of dictatorship and international sanctions, Myanmar (formerly called Burma), is now home to a small but fast growing tech start-up that offers everything from home-made food deliveries to the comics apps. But the country is still considered too risky by many large international investors.

Dressed in a traditional Burmese longhi, and a hat provides much-needed shelter from the scorching sun, a farmer planting rice seedlings in a paddy field in Shan state stops working briefly to flip the phone and check Facebook.

Only five years ago, when the mobile phone SIM card costing up to $500 (£380), this scene would have been unthinkable.Myanmar profile

But since international telecommunications companies open networks in Myanmar, SIM cards, the prices dropped to about a dollar, and four out of five citizens now have a smartphone – catapulting the country, the digital economy in the 21st Century.

Throughout the country, the ancient capital, the sense of change is evident.

Housed in a block of flats in the centre of Yangon is Phandeeyar, the first ever community tech hub, hosting hackathons and workshops. It provides space for start-ups in Myanmar, the first accelerator program.

Benefiting from the $ 25,000 worth of seed funding and mentoring from Phandeeyar, seven young start-ups engaged in their fledgling businesses.

In many, such as Shwe Bite, a market which offers home-cooked food to offices, are stimulating work rules in the more traditional countries.

Since its launch in September 2017, Shwe Bite has sold more than 5,000 boxes of lunch, at a cost of 2,000 kyats (£1.07).

“I decided to set up Shwe Bite because of my personal experience as an employee in the office away from home,” explains co-founder Moe Htet Kyaw.

“Most, like me, don’t have the time or the expertise to cook. On the other hand, in Myanmar, women, especially housewives, are looking for sustainable income for the family expenses.”

Shwe Bite connects these home cooks with busy workers. It’s not as fast as meal delivery services such as Deliveroo – customers to pre-order before 4 in the afternoon of the day before – but the company has lofty ambitions.

“It is available only in Yangon, but we plan to expand to other cities, and perhaps in other countries – there are a lot of Burmese who live in the counties of Singapore,” explains Moe Htet Kyaw.

One of Myanmar’s most successful start-up is White Merak Comic Studios, a comic book, the app, which has received $140,000 funding from three local angel investors in 2017 and now employs 20 people.

A big comic book fan growing up, co-founder and chief executive Aung Ye Kyaw launched the application in 2016, after the discovery that many small, dedicated comic shops was forced to close during the years of military dictatorship.

“I wanted to revive [the comics industry],” he says. “One of the main reasons for which he had had a fall is because people wanted to do just created the content, not the old reprinted comics.

White Merak

“With the previous government there was a lot of censorship, so that the artists could not innovate or be creative.”

White Merak currently has 1,000 subscribers paying 1000 kyat (54p) per month for the content, while around 3,000 people have so far purchased the individual episodes. The new generation

Jes Kaliebe Petersen, the Danish chief executive of Phandeeyar, says the first wave of smartphone-enabled tech start-up in Myanmar were “towards the centre of the village-classes for services” – such as the work of the database for professionals and property web sites.

This new wave is “targeting a new generation of digital consumers, in Myanmar, who do not necessarily live in Yangon or Mandalay that have a high disposable income, but it has already a smartphone”.

MM Tutor, for example, helps the parents to find private lessons for their children.

“No matter how rich or poor, most parents tutor for the children,” says Mr. Petersen. “The market is huge, but very fragmented. Now there is a platform that is open to all to vote for and book a tutor.”

One of the main challenges for start-ups in Myanmar is to take the payments.

“There are big payment system that people can use, for example PayPal and not a lot of people have a credit card or debit card,” says White Merak of Aung Ye Kyaw.

Instead, customers pay by topping up their mobile phone SIM cards.

Another challenge is the lack of legislation to protect intellectual property.

“There is a lot of piracy here,” says Aung Ye Kyaw. “It is easy to copy and duplicate. There are no laws for the time being.”

A new trademark law is expected to enter into force this year, but the White Merak has already put its preventive measures in place – to ensure that the subscribers can take screenshots of the comic on their mobile phones, for example.

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The lack of investment is also discussed the problem.

One or two start-ups were able to raise significant capital. The occupation of the site of the JobNet has received two seven figure us dollar funding rounds, while a software developer My Game was purchased by the Australian firm iSentric in 2017.

But on the whole there was little interest from investors who want to risk significant sums in a politically fragile country is facing international opprobrium for its treatment of Rohingya people.Myanmar Rohingya: What you need to know about the crisis

“Investors are reluctant to invest in these political conditions,” says Shwe Yamin Oo, the chief executive of RecyGlo, a start-up that organizes the recyclable materials pick-up service for offices in Yangon.

“[They] want to make sure that they get their money back. But, Myanmar has high yield, high risk”.

Despite the decades, the UNITED states sanctions lifted following the appointment of Aung San Suu Kyi’s democratic administration, the Western and East asian investors remain cautious, says Sui-Jon Ho, research manager for IDC Financial Insights.

Despite all the difficulties, Phandeeyar of Mr. Petersen is optimistic.

“As Myanmar’s economy grows and its middle class grows, it has all the factors in place to create a successful and thriving ecosystem,” in which he believes.

“There really is a good number of people to build the next generation of companies.”

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