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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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1818
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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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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Question & Answer
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Register for next webinars at:
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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
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