Global philanthropic investment firm Omidyar Network is considering technology-led businesses in the fields of media, finance and education in Myanmar for its next round of investments.
“We are actively conducting due diligence of a range of technology and media companies in Myanmar,” said Stephen King, partner and global lead for Governance & Citizen Engagement initiative at Omidyar Network.
The firms being considered include a couple of companies in the financial payments space. Omidyar Network could also make investments in some for-profit businesses in Myanmar.
Started by eBay founder Pierre Omidyar and his wife, Omidyar Network has financed a range of not-for-profit businesses in Myanmar. In the last three years, it has provided financial support of about $5.4 million, mainly through grants.
“We are likely to increase the rate of that investment year by year over the coming two to three years,” said King. This could mean a possible longer term engagement in Myanmar with Omidyar “pleased” about the performance so far of the investee companies in the country.
In Myanmar, Omidyar Network has provided funding to eTekkatho, provider of a free digital library to students and scholars in Myanmar, and made multiple investments in Phandeeyar, a tech hub which just completed its first tech startup accelerator program and introduced the Founder Institute in Myanmar.
Other investments in the country include Proximity Designs, Open Myanmar Initiative, Yangon Journalism School, Global Witness, Myitmakha news agency and Namiti.
King says Phandeeyar is a standout investment, having exceeded the investment firm’s growth expectations. Started with a grant from Omidyar Network in 2014 with investors including Schmidt Family Foundation and Open Society Foundation, Phandeeyar secured $2 million follow-on investment from Omidyar in June 2016.
“They have been successful on both counts. They have worked to incubate a number of small stage seed companies and they have also been able to be the destination for those who are interested in technology for social change,” he said. Phandeeyar is now looking to begin its second cohort in a few months.
Investments such as those in Global Witness, whose investigation into the jade business in Myanmar showed how the business was worth up to $31 billion in 2014 and controlled by military officials and drug lords, and Yangon Journalism School, which offers journalism training, have also borne fruit.
“The early success of those investments has reinforced the need for us to continue to stay engaged in the country and I think this is what we see as a longer term engagement from Omidyar Network in Myanmar,” said King.
King cites civic technology, fintech and edtech as areas in which the investment firm sees immediate opportunities. These are also areas with the potential to create maximum impact in line with Myanmar’s National League for Democracy-led government’s attempts to introduce market reforms and crack down on corruption.
For instance, the winners of a recent civic tech competition in Yangon are working on the issue of providing easier access to public service information. Similarly, the winner of Seedstars Yangon contest held last year, Digital Royal Net Solutions, created a software named ‘E-School’ lets schools and parents search for timetables of exams and results. With about 94 percent of the country’s 54-million population being unbanked and the recent opening up of the telecom sector, investors are being drawn to opportunities in the fintech space.
While tech-related new business ideas by startups are useful, King noted that there needs to be a consideration on how to extend technology and its benefits to population outside the urban areas.
Omidyar’s investment ticket size on each deal generally can go from $200,000 to up to $10 million. In Myanmar, the average ticket size will not go beyond $5 million, said King. This reflects Omidyar’s focus on early stage investments.
“We tend to look at early stage Series A round as that’s our preferred entry point. We like to provide growth capital,” said King. “We are very excited to be building up our presence and continue our investments in Myanmar.”
Omidyar Network, established based on the belief that every person has the potential to make a difference, has invested over $1 billion worldwide, of which $515 million has gone to for-profit investments and $568 million to non-profit grants.