Exclusive: There is a lack of risk capital for tech startups in Myanmar, says David Madden, Phandeeyar

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Photo: Juliet Shwe Gaung. David Madden, founder of Phandeeyar at the office in Yangon.

Phandeeyar – a place where one can create – is, as the name suggests, a tech hub where different stakeholders of the community converge to contribute to accelerate the technology ecosystem.

To date, this co-working  space has put together over 100 different types of events and 40 skill-building workshops.

Phandeeyar’s founder David Madden told DEALSTREETASIA “this is an incredibly exciting time for the Myanmar technology community. And its globally relevant. Phandeeyar is looking at contributing to the tech ecosystem here. We’ve seen the potential and we would love to accelerate the development of the ecosystem.”

Edited Excerpts:-

You are helping the development of the tech community by bringing different stakeholders together. What is your assessment of the technology ecosystem here?

Phandeeyar was born out of Code for Change Myanmar, which worked for the development of the community and helped them to use their skills to tackle some of the challenges facing Myanmar. We ran a few of hackathons in 2014 where we found real talent in the tech community here.

We also saw that there’s a real hunger on the part of civil society groups, social enterprises and SMEs to embrace technology.

The mission of Phandeeyar is to harness the potential of technology to accelerate change and development in Myanmar. We do this in two ways. First by fostering the technology ecosystem – improving people’s tech skills and supporting startups.

The second is by helping the change agents –  civil society groups, social enterprises, SMEs – by integrating tech into their work to improve their impact.

2015 was our first full year in operations. Our biggest activity was MaePaySoe, a two-week hack challenge run during elections. We got 137 developers (mostly apps and websites) to help people understand who to vote for and who the different parties and so on.

We had thousands of people coming through Phandeeyar last year. The workshops are almost over-subscribed. There are really exciting new technology companies like Total Gameplay Studio that are building products locally. Myanmar consumers are embracing these products. There’s a great pool of people who want to learn how to do the same thing. So the fact that 130 people crammed in here (Phandeeyar) in April is a wonderful example of how much excitement and energy is there in the community.

Which are your focus groups?
Phandeeyar is focused on the growth of tech ecosystem and the growth of  new generation tech entrepreneurs, developers and designers. Every week, we are trying to organise new events, workshops and meet-ups for the community, to help them improve their skills and connect with each other. To come up with new ideas, to learn about how things have been done in other places. That’s what Phandeeyar is all about.

How has the tech startup landscape changed here since you first came to Yangon?

It has been almost four years now since I arrived in Myanmar in 2012. There was only one mobile operator, Myanma Post and Telecommunications (MPT), a SIM card costed $250. Internet was extremely slow. The government had just announced they were going open up the mobile operator market.

Just a few years ago, there were only a few million people who had a mobile phone. Today, the mobile operators say that more than 45 million SIM cards are in use. In less than two years, Myanmar has gone from very small low level connectivity to more than half of the country being connected. When they are connected, they’re using Facebook, Viber and data. And so this is an incredibly exciting time for the Myanmar technology community. And its globally relevant. No other country in history can tell a story like this.

So, Code For Change Myanmar started in 2014 almost two and a half years from then. I think, in the past few years, we’ve seen incredible growth. At the first hackathon in March 2014, we saw how much energy and talent there was in the community. In our second hackathon in September 2014, we saw a really big improvement in product quality and sophistication. One of the winners of the first hackathon, Swan Htet Aung, has created MyanZen and they were one of the companies selected recently to go to Bangkok to participate at the Dtac accelerator program (of Telenor). What we’re seeing is skills are improving and quality of the products are getting better.

What do you think Myanmar’s startup ecosystem needs to grow?

The ecosystem is at a really early stage. Phandeeyar’s mission is to foster that but, in general, there really isn’t much risk capital available for startups. Most of the them have raised decent amount of money outside of Myanmar. There’s not a strong community of tech investors right now. If you look at seven of the best start-ups (in the country), they have all raised money from international investors.

There’s also a real lack of coaching and mentoring expertise in the market. In established tech ecosystems, you have these networks of experienced successful tech entrepreneurs and investors who provide guidance to the next generation. You don’t have that in Myanmar yet. That’s something that will take time to develop and there’s of course real infrastructure.

For startups to get an affordable space is really important. Property is really expensive in Yangon. For them, to get a good internet connection at a decent price, is still really, really hard.

There is a real hunger, energy and commitment. Other places in the region, like Singapore, are actually drowning in resources. There’s so much government support, accelerators, incubators and programs. It is much easier to be a tech entrepreneur in Singapore than in Myanmar. What that means is people who are doing it here are really serious and fighting against odds.

The opportunity here is enormous. There are so many products and services that are not available in Myanmar today. I would say one of the challenges facing tech entrepreneurs in Myanmar is choosing what to focus on. And when there are so many opportunities around, that can be a challenge.

What does Myanmar need to step up on innovative ideas?
There’s a lot that is  required to have an innovative economy or an idea based economy. Myanmar still has quite a long way to go on those things. There’s been a really serious under-investment in critical areas such as  education. You need a strong education system that is graduating people who have a really good understanding of science, technology, math.

Would you make investments in startups that you help scale?
Definitely. We’ve seen a lot of talent and we believe very deeply in the potential of this community and we’re going to do more and more to support it.

Can you talk about the co-working space and the kind of talent it is attracting?

As I mentioned, one of the challenges is property. It can be very hard to get a good place to work with facilities such as air conditioning, good internet etc. We have folks that are doing super cool things. There are people who are working on the next generation financial services, digital services and content. It’s great to see them collaborate and work with each other. Which is why people come to a co-working space.

At Phandeeyar, we offer a pretty good internet connection. With our own experience, I would highlight the point there is a need for a dramatic increase in the bandwidth in Myanmar.

Any new programs in the offing?

Last year we ran a lot of initiatives and we got a clear sense of where we could make a big difference here. So we’re developing our program to support those areas.

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