Government To Set Up Company To Manage Investments In Startups
Bangladesh Government previously announced a tk. 100 crore fund for startups, which came after a proposal sent by the ICT division last month to the cabinet division for forming a specialized company to invest and nurture local startups. Now, the government is working to form that specialized company aptly named Startup Bangladesh Company Limited to fund and nurture startups and ICT entrepreneurs of the country, reports the Daily Star citing an interview with the state minister of the ICT division Zunaid Ahmed Palak.
The new firm, which will operate under the Innovation Design and Entrepreneur Academy of the ICT division, will be responsible for managing the investment and nurturing startups with some 36 employees who will be appointed in the company.
What you need to know
- The Bangladesh Government is putting together a specialized company to manage the startup funding and activities. The initial preparatory work has already been done and the proposal will go to the next cabinet meeting for approval.
- Bangladesh government wants to fund 1000 startups and the move is intended to accomplish the goal.
- The newly established firm would be called Startup Bangladesh Company Limited, the firm’s paid-up capital would be Tk 500 crore.
- Initially, it aims to provide Tk 10 lakh each as seed money to about 200 startups.
- The firm will have a government-appointed board led by the secretary of the ICT division.
- This would be the first time government going to form a specialized entity to manage the startup funding. The Daily Star report says, “two years back the government created a fund of about Tk 800 crore to nurture innovative ideas on education, agriculture, health, financial services, e-commerce, e-Governance and some other service sectors under the iDEA project.”
Bangladesh Government, particularly the ICT Division, has been playing an active role in promoting startup and innovation culture in Bangladesh over the past few years. Numerous initiatives have been taken with various degrees of success. However, this is the first time the government is attempting to do it under a separate and independent firm.
Funding remains a key challenge for Dhaka’s startup scene, particularly growth and late-stage funding scopes are still scarce if you are not widely connected. Initiatives like this could fill that gap to some extent. At the same time, it could help fuel the momentum that has been going on in the startup scene of late. However, the success of the firm, as always, will depend on the standard of implementation for which government is not well-known for. Similarly, along with the funding, certain policy improvements such as making starting business easier and inexpensive, creating more investment-friendly environment would help the ecosystem go far.