With an agreement of investing Tk15 crore in seven startups in the first phase, the programme was inaugurated by State Minister of ICT Zunaid Ahmed Palak on Tuesday.
The government has announced an investment of Tk100 crore through government-funded venture capital – Startup Bangladesh Limited. The company will invest in 50 startups under the campaign titled “Shotoborshe shoto asha” (Which loosely translates to “Hundred hopes in a hundred years.”)
With an agreement of investing Tk15 crore in seven startups in the first phase, the programme was inaugurated by State Minister of ICT Zunaid Ahmed Palak at the auditorium of Bangladesh Computer Council on Tuesday.
The government has announced an investment of Tk100 crore through government-funded venture capital – Startup Bangladesh Limited. The company will invest in 50 startups under the campaign titled “Shotoborshe shoto asha” (Which loosely translates to “Hundred hopes in a hundred years.”)
With an agreement of investing Tk15 crore in seven startups in the first phase, the programme was inaugurated by State Minister of ICT Zunaid Ahmed Palak at the auditorium of Bangladesh Computer Council on Tuesday
The seven companies that received the investment in the first phase are Pathao, Dhaka Cast, Moner Bondhu, Chaldal, Edu Hive, Sheba.xyz, and Intelligent Machines.
Zunaid Ahmed Palak said that eventually Tk85 crore will be invested in 43 more companies.
“This investment will be mainly in equity sharing method where the government can face both profit and loss. However, we are hopeful that the companies will get better with this investment,” Palak added.
The State Minister of ICT said that many of the selected companies are past the seed level and are in the growth stage now.
But the Minister said that the government will invest in the institutions with the potential to bring welfare to the country and society even if said companies are at the pre-seed stage.
Noting that the government is working to create a business-friendly environment in the country, Palak said that the government wants an investment-friendly environment and will extend cooperation regarding this so that startups can create more jobs.
Speaking on the occasion, Deputy Minister for Education Mohibul Hasan Chowdhury Nawfel said that during the pandemic the entire education system has been in a critical condition and tech-based startups have helped the country during the time.
“We now have to support these companies financially so that educational activities are not hampered in any way. As we cannot return to physical classrooms yet, it is high time to strengthen online learning activities,” Nawfel added.
Saying that young people are engaged in exceptional initiatives in the country, Nawfel said that the young people often struggle financially.
He said that with adequate support, these youngsters will start working beyond the borders of the country.
“At this time of globalisation, we need to move towards a technology-based investment approach by reforming our existing investment systems,” Nawfel added.
He further emphasised researching various investment ideas and making ideas like mobile banking a practical success.
The Deputy Minister for Education believed that with the advancement of education-based start-ups, the loss encountered by the education system during the pandemic can be compensated.
He also expressed determination to work with the ICT Division and Startup Bangladesh to build a technology-based education system in the coming days.
Managing Director and CEO of Startup Bangladesh Limited Tina F Jabeen said that among all frontier markets, Bangladesh holds the most promising opportunity for venture capital and private equity investments. The country’s English-speaking, the tech-savvy young population is ready for deployment, she said.
“With its focus on financial inclusion, social equity, and equal access to technology, Bangladesh is positioned to become a stellar performer in achieving sustainable development goals by leveraging disruptive technologies and innovative solutions,” Jabeen added.
She added that this investment will primarily accelerate the development of promising startup initiatives.
The programme –launched targeting 50 years of independence and Mujib centenary to create an investment-friendly environment in the country – will invest the rest of the Tk100 crore following proper steps throughout the year.
Jabeen hoped to continue the programme even in the coming years.
In a press briefing at the end of the programme, State Minister of ICT Zunaid Ahmed Palak said that the information regarding the amount of investment each company is receiving is not being disclosed as part of the investment strategy of the companies.
However, based on the valuation of the companies, the companies have received more or less Tk2 crore in investment, he said.
Answering to a question of whether the institutions will receive increased investment if they do well this time, Tina F Jabeen said, “We have different plans for the startups. Those who received investment today, if they can do better, they will get more series-based investments later.”
“Even if the company progresses to the growth stage, an organisation can get an investment of up to Tk5 crore in a specific series of six months or one year. However, a company in its seed or early seed stage can receive investment worth Tk50 lakh to Tk1 crore. This will be equity funding,” Jabeen added.
However, Jabeen said that all their investments are based on the recommendations of the Investment and Portfolio Committee and the companies are recommended through risk and capability assessment. This investment will have a time frame and profit sharing will be through Certain Percent Ownership, she stated.
The mental healthcare startup “Moner Bondhu” received investment in the first stage and Tawheeda Shiropa, founder and CEO of the company said, “Through this investment, we want to make our services technology-friendly.”
“Earlier, people could come directly to receive mental health care but due to Covid-19, that scope is now limited. So, people are turning to tech-based services and this investment will speed up our work,” Shiropa added.
Regarding the investment process, Tina F Jabeen told The Business Standard that “In addition to our specific selection process, companies from any part of the country can apply to receive investment from this fund. But in that case, they will need a reference. Our team then will finish the process by verifying and selecting the application with honesty and efficiency.”
“All the manpower of our organisation has been recruited from the private sector and we are working towards empowering women while creating an investment-friendly environment,” she added.
Turkish Ambassador to Bangladesh Mustafa Usman Turan said that he and his country Bangladesh see massive potential for collaboration in IT and innovation between these two countries and are keen to develop partnerships in the information technology (IT) and e-commerce sectors.
Co CEO of US Market Access Inc Chris Burry also shared his excitement and wished Startup Bangladesh Limited all the success in the coming days. He believed that Bangladesh has already made good progress in developing the startup ecosystem and vowed to support the ecosystem through strategic coaching and networking.
Addressing as a guest speaker Chairman and CEO at Youngone Corp Ki-Hak Sung said, “I have been associated with Bangladesh for the past 36 years and am excited to be in this growth journey ahead. The company is eyeing to invest $1 billion over the next few years in Bangladesh.”
Startup Bangladesh Limited started its journey in March 2020 as the first and only venture capital company in the country with an allocation of Tk500 crore from the Government of Bangladesh. The company started its work at the field level by announcing this investment of Tk100 crore one year after its establishment.