An interesting pattern has cropped up as we comb through our EME database of all the startups and investments in Myanmar from 2012 onwards: we can identify three distinct waves of startups based on time, product and business model.
The first wave: fundamentals
Founded from 2012 to 2014 or so, the first wave of startups were the fundamental consumer internet platforms, mostly online marketplaces for cars, jobs, houses and travel. Often founded by repatriates who had worked in Singapore or the West, these companies included CarsDB, iMyanmarHouse, Oway and MyJobs, as well as more pure-technology companies like Bagan Innovation Technology (Myanmar-language keyboards) and Nexlabs (software development).
Rocket Internet entered the market aggressively in 2013 with a stable of platforms including house.com.mm, motors.com.mm, ads.com.mm and more, none of which are still alive today except Shop.com.mm, which is now owned by Alibaba. Honourable mentions go to the nascent social networks and chat apps which didn’t have much of a chance against the blue tide of Facebook that swept the country. Most of the first wave companies are either dead or dominant by now, although new competitors can enter their markets at any point.
The second wave: niches
From 2015 till 2017, the second-wave was defined by more niche value propositions. There was still a lot of low-hanging fruit to be picked by replicating successful overseas models in more specialized markets. These include companies like Joosk Studio (digital animation and illustration), Bindez (search engine & news aggregator) and Bagan Hub (B2B ecommerce). BODTech also made a round of investments in Flymya (travel), YangonD2D (food delivery), Innoveller (bus ticketing) and more.
Also included in the second wave were fintech plays, often by corporates or regional entities. These include large companies like Wave Money, Reddot, Ongo etc, all trying to stake out territory in the digital payments market. Many of these companies are beginning to see real traction, as they carve out their niche in the rapidly growing digital economy.
The third wave: experiments
We are seeing from now onwards a third wave, defined by greater experimentation, either with business models or with technology. Witness Expa.ai (chatbot builders), RecyGlo (recycling-as-a-service) or Mote Poh (employee rewards coupons). While some of these models have yet to be validated, the ecosystem is in a healthy state as entrepreneurs continue to innovate.
Some of this experimentation has been made possible by the entry of institutional investors and accelerators, for example Phandeeyar, whose accelerator program has graduated 11 startups and counting. The incubator / accelerator space is becoming increasingly crowded, with Rockstart Impact, SeedStars, Impact Hub and more beginning to make their presence felt.
EME sees opportunities across all three waves of startups. CarsDB, one of our first two investments, is a leading member of the first wave as undisputed #1 in online car classifieds. Our other portfolio company, Joosk Studio is a definite second-wave company - providing a first-of-a-kind product in a specialized field with opportunities for further expansion. We’ll continue to look for companies across this whole spectrum as the Myanmar startup ecosystem develops further.
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