Myanmar Webinar 1 The Social Investing Landscape

8/13/2019 Myanmar Webinar 1 The Social Investing Landscape

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avpn.asia

AVPN Webinar4 December 2013

Myanmar series #1

- The Social

Investing

Landscape

Project Hub YangonInsitor Management


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Start-Up incubator | Co-Working Space

Yangon, Myanmar

Presentation for AVPN Webinar

Allison Morris

Co-Founder


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The environment for social enterprise in Myanmar

Barriers to entrepreneurs in Myanmar

What does Project Hub Yangon do to help entrepreneurs?

Our work so far

Outline


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Social Enterprises in Yangon

Restauran

ts

Productsfor/

by

BoP

Ca

pacity

Building


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Lack of financing options (loans, investment)

Barriers to entrepreneurs in Myanmar

Uncertain regulatory environment

Limited capabilities of human resources

Lack of infrastructure

Its expensive

Lack of entrepreneurial skills training


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Creativespaceto

work

How do we do it?

Incubation Programs Global Entrepreneurship Week

Our missionSupport the development of a vibrant start-up scene in Yangon


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Co-Working Space

Providing start-ups

and consultants withan affordable, flexible

and great place to

work.

Wifi / Coffee / Desks

Networking

Seminars

Event space rental


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Global Entrepreneurship Week

Over 140 countries

20,000 events

One week

An opportunity to highlight the challenges entrepreneurs face and toinspire future entrepreneurs.

In 2012, Project Hub hosted the first GEW Myanmar with 4 events.

In 2013, 10 partner organisations joined us to put on 9 events.


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Incubation Programs

Ran first incubation program in 2013

8 Entrepreneurs

6 start ups

15 workshops

7 Mentors

5 months


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Our approach to incubation

Entrepreneur

Experienced Mentor


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Targeted workshops by experts


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Exposure and Networks


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After 5 months, theyre ready to pitch to investors


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Start Ups launched by our Fellows

Prepaid

Master


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Thank you


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Social Investing Landscape in

MyanmarAvpn webinar

04 December, 2013


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Insitor Management introduction

Insitor Management is an impact investment firm withoperational headquarters in Phnom Penh and offices in New

Delhi and Yangon.

Insitor Management is the exclusive investment advisor of

Insitor Impact Fund, a venture capital fund that finances

businesses with the potential to improve the lives of low-income families in emerging and frontier markets.

Geographic focus is on Developing Asia, where nearly 2

billion people have limited or no access to clean water, quality

food, secure shelters, affordable healthcare, efficient

infrastructures, or comprehensive financial services.

An investment advisor focused on frontier markets


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Insitor Management approach

Target investees are start-ups and early stage businesses, with the

intent to bridge the gap between initial grants/seeding investments

and the later stage funding that is available from most impact

investors.

Goal to build companies to a larger scale and higher profile that will

be attractive to larger pools of capital.

Our locally-based team offers hands-on support, drawing from our

experience as entrepreneurs, strategy consultants, and finance

professionals.

We have been active in Myanmar since 2011, we have set up our

representative office, built out our network, and screenedcompanies. For the next 6-12 months we will keep providing pre-

investment services to promising start-ups with the expectation to

close the first investment by the end of 2014.

Invest and build


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MYANMARthe market A rapid shift to democracy, marked by the military-led governments political and

economic reforms in early 2012, is seeing the country open up to the rest of theworld.

However, roads and power infrastructure are in short supply, foreign investment

law is constantly shifting, and the banking sector is severely undeveloped.

Multinationals have been undeterred, as interest in the largely untapped market

grows. Already, Japanese companies have started to enter the market. Chinese,

Thai, and Singaporean companies have been active in Myanmar for some time.

The sectors of immediate interest are agriculture, oil and gas, real estate and

infrastructure, and consumer goods. Manufacturing and other sectors will

develop gradually.

A low-cost labor force and growing manufacturing base are also likely to attract

businesses that are looking for viable alternatives to China. Some small PE funds are already starting to focus on Myanmar but few

transactions have taken place.

Frontier market, substantial opportunities, barriers remain


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2020

MYANMARmacro indicators

Equival

ent to

10m

people


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MYANMARsocial enterprise landscape

With one third of the countrys 60 million people living below the poverty line

and with limited or no access to basic services, the need for social

businesses is clear.

The agriculture sector is particularly attractive as 70% of the population is

rural and depends on agriculture for their livelihoods; the majority of them

have no access to affordable credit, insurance, crop inputs, or training on

modern farming techniques. While social business is a new concept in Myanmar, a few pioneering

Burmese social enterprises already exist.

A community is being built to accelerate growth in the sector.

Regional social businesses are also exploring replicating their models in

Myanmar either through dedicated country operations or through franchising

models.

Organizations other than self-identified social enterprises making impact are

extremely diverse and decentralized - SMEs, associations, co-ops, non-

profits, etc.

High need country, impact being created by diverse set of actors


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2222

Few impact players

NGOs, co-ops, and associations still

dominating the market and

promoting the sustainability culture

Lack of relationships across sectors

and legal entities

Little grasp of international standard

reporting and corporate governance Very new culture of equity

partnerships

Lack of government capacity or

organization

Undeveloped banking sector

Lack of reliable and frequent data

Myanmarthe Challenge

Focus on existing players in

traditional industry with natural

social impact

Go greenfieldwith the right partner

Work on NGOs

spinoffsacknowledging the

challenges

Provide angel investments or grantsto fund pilots and prototypes

Educate entrepreneurs on the

requirements of international

investors

Provide training on business

planning

Contribute to frameworksdevelopment as much as possible

Lobby, lobby, lobby

Pioneers have a bumpy road ahead

issues options

In a loose investment scenefirst comers are in a good position

to con tr ibute to set t ing standards


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Recaplessons learned

Although important everywhere, critical to be local to invest in Myanmar: Building trust with entrepreneurs

Establishing extensive network in decentralized market

Conducting primary data collection and market research

Overcoming local entrepreneurs and institutions fatigue of foreigners

Following investments with an intensive hands-on approach

Keeping current on changes in legal and regulatory environment

In the short-term investors must either adapt their approach to Myanmar or wait: Start-ups, greenfield, mixed model SMEs, or NGO and SME spinoffs

Flexibility on reporting and governance with the view of improving post-investment

Unclear and shifting regulatory environment

Invest and build

Better coordination needed to develop ecosystem: Understanding the players, their roles, and their commitment/timing to Myanmar

Be local and flexible if interested in the short-term


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MYANMARinsitor plans We expect to make 4 to 6 investments in early-stage companies across the

country over the funds investment period (5 + 1 years).

In the early stages, the Fund will focus on the following sectors:

Agriculture-Related Companies

Traditional focus on technology inputs and creating higher outputs and

prices for farmers;

Silos and crop-storage facilities to help obtain higher prices year round; Value-added processing of abundant and regionally competitive crops

to help raise farmer incomes and create an export market.

Low-Carbon Energymainly hydroelectricity and solar mini-grids

Affordable Housingin the next few years, plans for affordable housing in

the suburbs and peri-urban areas of Yangon will have great potential

In later stages, the Fund will focus on companies that offer low-income families

options for increased access to clean water, sanitation, healthcare, and

education.

Slow investment pace, primary focus on agriculture and energy


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Example of investment approach

Conducted extensive market research on agriculture sector with the view of

investing in a greenfield project: Identifying key needs, challenges, and opportunities in order to short-list areas of priority

Networking within the industry and outside of the typical impact space to identify local partner

Created partnership with local institution aligned with our view of the sector.

They pitched an idea for a business working with a specific group of smallholder

farmers to create both financial returns and strong impact to the community.

Together we are working to further define the potential business model, and co-create a feasibility study and business plan based on their experience.

Currently conducting primary data collection and market research to

confirm/reject major assumptions of business model.

If confirmed, aim to create a new joint venture and provide capital for pilot

(


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- Please type your questions into the box on the

control panel

Question & Answer


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Register for next webinars at:

http://www.avpn.asia/events

11 December 2013:Myanmar webinar 2: International foundations in

Myanmar

15 January 2014:Myanmar webinar 3 Myanmar in Context: Internal

Dynamics and the Contest for the Nation
http://www.avpn.asia/eventshttp://www.avpn.asia/events

Myanmar Webinar 1 The Social Investing Landscape

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