Daiwa PI Partners, a subsidiary of Japan’s Daiwa Securities Group, contributed $5 million in exchange for a stake in Oway Pte Ltd. The deal marks Daiwa PI’s second private equity investment in Myanmar, according to a release on April 11.
The other investors in Oway’s latest funding round include Belt Road Capital Management, NSI Ventures and Cambodia-Laos-Myanmar Development Fund II LP, a fund under Emerging Markets Investment Advisers.
This will be the first investment in Myanmar by Belt Road Capital Management (BRCM), a Mekong-focused private equity firm, and its second in Asia. The investor said it contributed $7 million to Oway’s latest round.
Phnom Penh-based BRCM is raising funds for a $50-million fund. It had earlier invested A$2.25 million ($1.8 million) in Australia-based Digital Classified Group (DCG) which backs online classified portals like realestate.com.kh and others in Papua New Guinea, Fiji and Laos.
Oway was founded by Nay Aung, a Myanmar national who had previously worked at Google and Blue Lithium. The firm began offering online travel services in 2012 and ventured into the ride-hailing business in 2017.
“In addition, Oway has become the first licensee of three-wheeler taxi hailing operator in Mandalay in November 2017 and plans to expand its service network in other areas. The capital raised will be used for further expansion of their services,” a Daiwa PI statement said.
Daiwa added that it expects demand for both online travel and ride-hailing services in Myanmar to soar on the back of growing middle-class affluence and changing lifestyles and aspirations.
Oway is now gearing up to launch its mobile application. The app will initially focus on flight reservations and later branch out into hotels and other services. Also on the cards is a digital payments solution, Oway Pay. The firm expects to launch the payments offering in the next few months.
Oway had last raised a $10-million investment in 2016 from investors including Northstar Group, which also backs Indonesia’s ride-hailing major Go-Jek, Emerging Markets Investment Advisers Pte Ltd (EMIA) and IFC.
Myanmar’s smartphone penetration rate has rapidly increased after the telecom sector was opened up to foreign players in 2014. This has spurred demand for consumer internet services such as ride-hailing in the country.