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Local startups call for greater private sector support, changes to tax regime


While local start-ups are increasingly becoming drivers of change in Myanmar, obstacles remain for new companies to expand their reach and properly execute their projects.

Daw Hla Hla Win, CEO and founder of a Yangon-based education startup called 360ed which uses virtual reality and augmented reality applications to promote new ways of learning in Myanmar, spoke to the Myanmar Times about the challenges the startup was facing.

“First, we need greater capital from investors. Secondly, the tax on startups is unreasonably high, which makes it hard for us to survive,” she said.

360ed ran a pilot program in 20 schools across Myanmar and successfully ran a test drive for its new Dat Thin Pone English-learning application. By localising its applications to specific regional languages, 360ed aims to have a broad rural reach.

Local challenges

Daw Hla Hla Win told the Myanmar Times the start-up has ambitions of expanding its projects into the rest of Asia as well as Africa, but lacks the capital required to expand into these regions.

“We have the expertise and ideas to expand our services beyond Myanmar, but we lack mentorship and capital, which is difficult to access here. Every startup requires capital to transform its ideas into real products and services,” Daw Hla Hla Win said.

As such, the government should re-evaluate its taxation regime and provide clearer regulations and enforcement of intellectual property rights to provide start-ups with greater support, she added.

“Start-ups should be given similar incentives to those in Singapore, where they pay just one third of standard corporate taxes. The taxes currently imposed on start-ups are comparable to those imposed on established businesses and corporations,” Daw Hla Hla Win told The Myanmar Times.

Jes Kaliebe, CEO of Phandeeyar, an accelerator which invests in local technology start-ups, trains local entrepreneurs and works towards building the pool of tech talent in Myanmar, said building infrastructure and improving access to utilities are key governmental priorities.

“However, it is critical that investors with the relevant know-how and sufficient financial muscle collaborate with the government to efficiently promote the sector,” she said.

Private investors

Nevertheless, it is the private investors like Phandeeyar that have the greatest potential to promote IT advancement through startups, Ms Kaliebe said.

Phandeeyar is working towards optimising the connectivity revolution in Myanmar and was responsible for launching Myanmar’s first ever tech startup accelerator in 2016. The company received a $2 million grant of funding from Omidyar Network that year and in 2017, invested in 7 new tech startups in Yangon.

Another accelerator program, Dutch-based Rockstart, has invested in more than 100 startups internationally, expanded its operations to Myanmar in March this year and has been training a cohort of entrepreneurs from a diverse range of sectors including energy, food safety, construction, tourism, agriculture and education. Similarly, the GSMA Ecosystem Accelerator Innovation Fund invested for the first time in two local Myanmar startups, Kargo and New Day (NehThit), earlier this year.

Connections to foreign capital from organisations such as Rockstart, Phayandee and GSMA are necessary for Myanmar startups, said Martin Pun, Yoma Bank’s head of Corporate Social Responsibility. “Every startup and SME needs capital, not just Myanmar’s but those from all over the world,” he said.

In the meantime, Daw Hla Hla Win remains optimistic about her plans of 360ed, stating that, despite the setbacks, it was capable of selling almost 15,000 units per month and the public is becoming increasingly interested in the use of new technologies in education.

“We intend to introduce our technology for every subject at the state level of education. Currently, most students are learning by memorising information – this is inadequate. The use of augmented reality and virtual reality will change this style of learning,” she said.

Source: Myanmar Times

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