Calling all Myanmar start-ups: Do you have a good idea and proof the market likes it? If so, downtown Yangon innovation lab Phandeeyar may have US$25,000 for you.
The community tech hub has gone live with its new start-up accelerator, a six-month program targeted at companies with no significant previous funding, offering budding businesses access to capital, mentorship and a suite of free services valued at more than $200,000.
Since Phandeeyar opened its doors in 2014, the non-profit has run lots of events and worked extensively with the market’s tech start-ups, according to founder and CEO David Madden.
“We got a really acute sense of both the opportunity and the level of talent in the start-up community but also of the challenges they face,” he said.
At the top of the list is access to the first round of cash that allows start-ups to move away from selling other services – like application and website-building – that pay the rent, he said.
Meanwhile, the market also struggles with inexperience around tech investing, a lack of coaching and the difficulty of finding “the next cheque” – follow-on investment from the first injection, Mr Madden added.
Phandeeyar’s solution to these problems is to build an accelerator.
The project is backed by “a group of experienced international tech investors”, according to Mr Madden, as well as one of Phandeeyar’s original investors, Omidyar Network, which recently provided the tech hub with $2 million in grant funding.
“We want to invest in this next generation of entrepreneurs who are going to build the products and services that are going to power the digital leapfrog,” said Mr Madden.
The program is initially slated to run for three years and train 15 to 20 start-ups – between four and eight per year. Acceptance into the program earns companies $25,000, space to work at Phandeeyar free of charge, support from the organisation’s accelerator team and a wider web of more than 30 coaches from Myanmar and Southeast Asia.
In exchange for resources and investment, Phandeeyar Accelerator will be entitled to 12 percent equity in the start-up if the company is able to raise another round of funding in the future, according to Mr Madden.
Investment will go through a Singapore special purpose vehicle, and start-ups will need to set up Singaporean entities, Phandeeyar said in a presentation.
The accelerator program also allows each company to use more than $200,000 in resources from Facebook’s FB Start, Microsoft BizSpark, Amazon AWS, Today Ogilvy, PwC Myanmar, Telenor Myanmar, Wave Money, JobNet and Edulink.
Partners are offering expertise and a range of services including credit for cloud-hosting and advertising, optional English classes and help with financial management, the organisers said.
Another boon for accelerator participants will be connections to investors that could provide entrepreneurs with capital beyond Phandeeyar’s seed funding.
After six months, the tech hub will organise for the start-ups to present themselves to potential backers on a “demo” day, said Phandeeyar Accelerator director Jes Kaliebe Petersen. “Hopefully, we’ll get some cheques on the table,” he said.
Applications for the program opened last week and close at the end of July, for a September start for the first group. Around eight applications have already come in.
Entrepreneurs may want to wait to submit though.
Phandeeyar will run workshops and get-togethers in the coming weeks that could help start-ups shape up before the due date, according to Mr Kaliebe Petersen.
Teams have a better chance over solo-run start-ups, he said, and though a minimum viable product – an early version of what a start-up aims to offer – isn’t necessary, it is appreciated.
“We’re looking for serious teams who are committed to tackling some of the really big problems and challenges in the Myanmar market,” said Mr Madden.
“Phandeeyar believes deeply in the potential for Myanmar to leapfrog to a digital economy.”