“The military is in power, and it couldn’t care less about startups,” a founder from Myanmar told e27. “The military has much bigger things to worry about.”
The startup industry of Myanmar, a nation of 54 million currently under military rule, is in dire straits. The COVID-19 pandemic, followed by the coup d’état in February 2021 and the ongoing financial slowdown, has led to umpteen problems. Imports are strictly limited, bank withdrawals are restricted, and gasoline prices have risen over 250 per cent. Electricity is routinely cut off even in Yangon, the largest city.
As a result, over 70-80 per cent of startups shut down (as per Tracxn, there are currently 345 startups in Myanmar), the person shared on the condition of anonymity. The most notable is One Kyat, a general classifieds app owned by Singapore’s Carousell.
Some, like Ringier, exited Myanmar (JobNet.com.mm has now taken most of its market share in Myanmar). Even big businesses, such as Telenor and Ooredoo, either shuttered or sold.
“Some companies shut down because they ran out of funding while others simply because they couldn’t operate under economic uncertainties,” the person revealed.
As the military junta tightened its grip on the government, pro-democratic people, including founders and techies, took to the streets.
However, these movements were crushed. Several prominent founders were framed and arrested, many fled the country for safety after imprisonment for six to 12 months, and some got killed in interrogation camps.
Scores of IT industry employees (highly skilled and English-speaking) fled to foreign countries through legal or illegal immigration means in search of livelihood. Some joined the People’s Defense Force (PDF) as soldiers. The PDF is the armed wing of the National Unity Government formed by the youths and pro-democracy activists on 5 May 2021 in response to the coup. A few stayed in the country because of family attachments; some are still underground, fearing arbitrary arrests.
What triggered the migration?
The migration — mostly to neighbouring Southeast Asian countries such as Thailand, Vietnam, Singapore, and Cambodia — was primarily triggered by the coup. Early-stage founders began the migration first. Late-stage firms and well-established IT companies with over 20 years of existence later followed suit.
“Our economy was stable even during the first year of the COVID-19 outbreak. Barring the brick-and-mortar startups, many digital and tech startups in Vietnam saw good business. There were no workforce reductions or resignations, while there was great distress in many parts of the developed world,” said another person who wished not to be identified.
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“However, the coup turned things around for the worst. The digital ads vertical was the first to be impacted, and then tech startups. The first few weeks of the coup were hard because of the blocking of the internet and social media [by the military junta]. Everyone had to use VPN to access social media. Hence, all the geolocation-targeted ads became useless,” added the person, who has held a management-level role in a startup.
In the early months of public protests, all those young workforces in digital businesses were either on the streets or becoming keyboard warriors, creating digital content on social media and motivating the general public. Everyone expressed the desire to join the democratic protest and opposed the coup.
“With the failing infrastructure, restrictive internet, citizens being watched, shocks to the banking industry, and frequent blackouts in the past two years put all thriving startup and tech industries to their final halt,” shared the second person. “Our startup industry is toppled, if not crashed. No typical angel or VC investor will invest in startups in the country unless they are passionate about something.”
Myanmar vs Thailand
Thailand has been the main destination for the fleeing founders and the IT workforce. While some moved their companies to this Kingdom, some joined the corporate life.
Thailand is a developed economy with good infrastructure and offers a variety of visa options. The Thai economy is enormous, and its digital ecosystem is advanced with e-commerce and consumerism. The living costs are lower compared to Singapore or even Myanmar. Moreover, Thailand and Myanmar share many similarities, including culture, food, and festivals.
However, regulations in Thailand, such as 51 per cent citizen ownership, are not startup-friendly.
Other countries, such as Singapore and Vietnam, are also good options. “Thailand is one of many options. Almost every possible tech startup is diversified and re-registered in Singapore, the US or Thailand. Only a few remain in Myanmar,” said the second person. “It will take another five to ten years to rebuild the startup ecosystem in Myanmar, starting when the revolution won.”
Despite all the problems, some are still confident and expect Myanmar’s economy to revive soon. They see some positive signals. “While some big businesses shut down or sold, we know many companies that have stayed in Myanmar (especially the Southeast Asian companies or investors),” said another Myanmar-born entrepreneur. “I know of some founders who left for other Southeast Asian countries for other opportunities. I also know others who returned to continue to operate their businesses in Myanmar and take more market share, supporting the rest of the economy and customer base with less competition in the market.”
According to this person, even in these difficult times, the economy and safety in major cities seem more stable for the time being. “We hope it will continue to bring peace, prosperity and opportunity again to the wonderful people of Myanmar in the future.”
However, things don’t look good for now. The military junta so far seem to initiate any action to bring back the tech talents and startups from other countries and offer them a conducive atmosphere to operate. They have bigger things to worry about.
“There are many software engineers, copywriters and social media specialists whom I personally know are in the PDF investing their lives in strong commitment. I am looking forward to the days to create jobs and sustainable businesses for them to get back into the lives they deserve,” noted one of the people mentioned above.
Does the junta care?
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Copyright: adirach
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