Myanmar-based domestic travel startup Flymya laid off a third of its approximately 200-strong headcount, says CEO Jeff Pan. The move happened prior to reports on March 23 that the country had confirmed its first two cases of Covid-19.
“With 95% certainty, we knew that the market was going to bottom out very quickly so we took a very long-term view of the situation,” Pan told Tech in Asia. Business conditions were already challenging before the pandemic hit Myanmar, with airlines seeking bailouts and travel companies slashing jobs, he added.
His predictions have proven to be accurate. Flymya, which serves travelers from all over the world who are headed to Myanmar, saw its bookings drop as international commercial flight routes and popular local destinations closed.
Before the pandemic broke out, the company was projected to bring in US$30 million in annual booking revenue with a two-year burn rate. While it had achieved its target for the first quarter of 2020, the company now expects that number to plunge by as much as 90% in Q2. After taking into account the recent job cut, which reduced payroll costs by about 20%, Pan says Flymya will be able to maintain its burn rate.
“You have to prepare for the worst-case scenario,” says Pan. “We fully expect to come out of this, reset, and we’ll be sort of back to where we started.”
In order for Flymya to weather this challenging business environment, Pan adds that it can’t just “do business as usual.”
“Only the most creative companies can survive massive downturns,” he explains. “It’s worth noting that Airbnb and Uber were two travel startups that rose from the ashes of the 2008 financial crisis.”
Flymya is currently taking steps to scale down its user acquisition efforts and focus on improving on its code base and DevOps processes, which Pan says is a “silver lining.”
“You can take the time to reset, organize things. You can take time to do a lot of migrations so that’s nice,” he shares. “You don’t normally get the chance to prioritize that because it comes at a cost of engineering resources. We’re operating on a ‘day zero’ strategy, as if we were just forming a new company.”
Despite the slowdown in business, Pan says that Flymya is not seeking fresh funding.
“Luckily, we’re in a decent cash position, so we don’t have to fundraise – it may actually benefit us if we can emerge from this intact,” he explains. “I had a few conversations [with investors] prior to the crash, but I’m almost certain those conversations will go nowhere now.”
In the meantime, Pan says that the situation in China makes for a good case study to understand how the outbreak will affect business in Myanmar.
“With China, its domestic travel completely collapsed once all the quarantine measures were in place. [But that] is picking up now that everything’s going back to normal,” he observes. “We fully expect those two event patterns to play out here.”
Despite Pan’s optimistic view of how things will improve after the pandemic, consumers in China are still hesitant to return to their normal lifestyle.
Founded in 2015 by Mike Than Tun Win, Flymya bought hospitality system provider Switch two years later to boost the growth of its hotel bookings business. Pan, who started the UK-based software company in 2016, joined Flymya as CEO in 2018, while Than took on the role of chairman.
In 2016, Than also founded BOD Tech Ventures, which has invested in a number of other Myanmar-based startups. While Flymya was hit hard by the decline in the travel industry, BOD Tech Ventures’ other portfolio companies – including microfinancing platform Daung Capital, food delivery startup Yangon Door2Door, online education startup DedaaBox, and ecommerce platform Spree – have seen a rise in business, Than says.
Note: This article has been updated with additional comments from Flymya.