Sami Ahmed is the Managing Director of Startup Bangladesh Limited, a Government of Bangladesh-funded VC firm, actively backing local startups. Prior to joining Startup Bangladesh, Mr. Ahmed was the Policy Advisor of the Leveraging ICT for Growth and Employment of the IT-ITES Industry (LICT-2) Project of the Bangladesh Computer Council, ICT Division. Before that, he was the Executive Director of the Bangladesh Association for Software and Information Services (BASIS) and was instrumental in many policy reforms for the Industry and in organizing key ICT events in the country. Mr. Ahmed also worked at the a2i Project of the Prime Minister’s Office where he was part of many national initiatives under the Digital Bangladesh platform and played several roles including leading the Innovation team.
Bangladesh has consistently been named as one of the fastest-growing economies in the world for the past several years. Many call the country the new Asian Tiger. A quick glance at Bangladesh’s GDP shows an astonishingly smooth growth path. The country of 160 million people has surpassed both its neighbors India and Pakistan in terms of GDP per capita. Bangladesh also outperforms its neighbors in a number of important human development indexes.
Compared to the economic opportunities the country offers, Bangladesh’s startup scene suffers from a puzzling lack of attention from global investors. Despite the phenomenal economic growth, a young demographic, and a growing middle class, Bangladesh sits at the bottom rung when it comes to attracting global funding for its startup ecosystem. For instance, in the first quarter of 2022, some 12 Bangladeshi startups raised about $57 million in disclosed funding. That's utterly insignificant compared to the opportunity the country offers.
It is true that Bangladesh’s startup ecosystem has a long way to go. There are many challenges. The ecosystem is at a similar point to where Indonesia was 5-6 years ago. But the country should simply have more global attention.
Startup Bangladesh Limited, one of the most active local funds, says it not only wants to invest in startups but it also aims to help transform the country's startup ecosystem. The Government-funded VC firm has backed 15 companies so far and counts some of the most prominent startups in its portfolio. It sits at the intersection of the private sector and public sector, which allows the firm the rare opportunity to see both worlds and provide practical policy inputs to shape the ecosystem. The firm has its own ambition and mandate. However, being a government-funded firm, its mandate should be different from conventional VC firms. It should remain ambitious in terms of making investments in high growth and game-changing startups. In addition, the firm has this unique opportunity to do much more.
To that end, Mr. Ahmed is one of the most important people in Dhaka’s startup scene. He has an excellent track record of working in the digital and technology policy landscape in Bangladesh. His previous work experience with BASIS, the country’s leading private sector technology business association, provides him an insider grasp of many challenges and opportunities of the industry.
In the interview that follows, we sit down with Mr. Ahmed who talks about his personal journey and views about the startup and tech landscape in Bangladesh, lays out the vision of Startup Bangladesh, how the fund came into being, how the company functions, what is its investment thesis, the ambition going forward, how it approaches its investments and works with the investee companies, its fascinating position at the intersection of the private sector and public sector, what it looks for in companies and team it invests in and much more. This is one of the most fascinating interviews I have done in recent times. Enjoy!
This was a much longer interview, so we had to divide it into two parts. This is part one, please come back later next week for part two.
Ruhul Kader: Thank you for agreeing to this interview. We may begin with your early life, your childhood, where you grew up, and went to school, and from there your academic and professional journey to what you are doing today.
Sami Ahmed: I was born and grew up in Dhaka. I went to Maple Leaf International School in the 80s. I gave my O-levels in 1991 and A-Levels in 1993. In 1994, I went to the US to the University of Texas, Austin to study computer science. I stayed in the US for a while, studied, and worked there.
In October 2008, I came back to Bangladesh right before the digital Bangladesh initiative was declared. I didn't have a solid plan to stay back. I originally came to attend a family program. While staying in Dhaka, I decided to look around, see the opportunities available and whether I could stay back.
After all, if you stay in the US or any other western country, life might be a little better but at times you do feel that you don’t really matter and your work doesn't really have an impact on society. You realize that the impact of your work is limited or you are not making a difference in the right place. Despite the material comfort, there is little fulfillment.
While in Dhaka, I could sense that Bangladesh was at a stage where I could make a real difference using my experience and expertise. I felt that whatever I do I could have a lot more impact, which was why I decided to stay and explore.
The first year after I came back was tough. I was away for almost 14 years. There was a cultural shock. It took me a while to adjust. I would say the first two years I had difficulty adjusting. I joined a private company as the head of their MIS Department. Later on, the same company started an IT firm and made me the head of the operation of the new company, which I ran for a year and a half.
I came to know about the A2i project at the Prime Minister’s office around this time. The Digital Bangladesh project was declared. A2i was implementing the Prime Minister's digital Bangladesh mission. I looked at the details and got fascinated. It seemed like something I would like to do.
It also spoke to my motivation to return to the country. I wanted to come back and stay in Bangladesh because I wanted to create an impact in my country. Given my background and expertise in technology, A2i seemed to be an ideal place for me. So I applied for a job at A2i. Nobody knew me back then. So there were questions about whether I would be able to deliver or not. It took me over a year and a half to finally get into A2i. The work was gratifying. My earlier work involved a lot of government automation projects, which taught me a lot. We now have a national portal framework but we didn't have these things in those early days. It was a huge experience for me. I was excited to be able to contribute.
I joined A2i in early 2012. After two years, in 2014, the then-BASIS President Shameem Ahsan reached out to me and asked whether I would be interested in joining BASIS as an executive director. He saw my work at A2i.
BASIS was looking for an executive director at the time to lead the association. Shameem bhai told me that “given your experience and track record at A2i, we think that you would be an ideal candidate for the position.”
I had already spent two years with A2i and wanted to explore something different. After some thought, I agreed to join as the Executive Director of BASIS. For the next two years, I worked with BASIS in the technology industry.
It was a new and different experience for me. I had an opportunity to build an excellent network in the industry. It also allowed me to have a closer look into the technology industry of Bangladesh and understand the challenges of the industry. I came to learn about the IT industry landscape, different types of companies in the industry, and their challenges. As an Executive Director of BASIS, I had an opportunity to work closely with these companies.
After working for two years for BASIS, the LICT project reached out to me to become their component team leader. LICT was a project of the Bangladesh Computer Council funded by the World Bank. Since they work with the private sector, we had interaction with them when I was working for BASIS. In fact, we worked closely with LICT from BASIS. The LICT project had two wings: one related to the public sector such as government application, cyber security, etc and the second was private sector growth. They asked me whether I would be interested to join and lead their private sector growth wing. So I applied and got in. Ever since I have been working closely with the ICT Division.
I started working with the LICT project in 2016. The LICT project came to an end in 2019. Then we started a small two-year project—a 100% government-funded project also named LICT—to continue the work of private sector development until a new project came in to take over, which has since happened. A new project called Enhancing digital government and economy project (Edge), a $300 million project of the World Bank, has come in its place. I helped design the LICT project and then the Edge project. I looked after the running, oversight, and implementation of the LICT project.
After almost six years, obviously, you know, I joined Startup Bangladesh Limited as the Managing Director in February this year. I'm also the honorary advisor of the Edge project. So I now play two roles. I advise the Edge project and I'm running Startup Bangladesh Limited as the Managing Director as of February 2022.
That is my professional journey with digital Bangladesh in a broad stroke.
As you could see, throughout these years I have worked closely with the Government. In fact, when I was working for BASIS, we worked closely with the government to implement the digital Bangladesh vision.
To that end, for the last ten years, I have been working on the Digital Bangladesh mission and implementing the vision of the Honorable Prime Minister and the Honorable advisor to the Prime Minister of ICT Affairs Mr. Sajeeb Wazed Joy. Our Honorable advisor to the Prime Minister of ICT Affairs Mr. Sajeeb Wazed Joy directs us. He sits with the ICT Division and provides us guidance about what needs to be done, which then our State Minister for ICT Division Zunaid Ahmed Palak MP takes to the implementation. I work closely with our State Minister to make sure that the part that I work on is aligned with the vision of the government and that we're implementing the Government's ambition to create an equitable and modern Bangladesh.
Ruhul: I have a few more questions about your path to what you are doing today. Before that, I want to ask about your exposure to digital Bangladesh initiatives. Since you have been involved with a lot of government digitization and technology initiatives, could you please briefly touch upon some of the things that have been taking place in terms of technology inclusion, taking technology to the people who essentially don’t have access to technology?
Sami Ahmed: When the Government first conceived the idea of Digital Bangladesh, the first question that came up was that many people are not technology literate in Bangladesh. And we don't have electricity power across Bangladesh. So how is it going to work? Many people were making fun of the idea when it was first declared. People were saying this would not work. The government, however, said it would happen and to understand how, you have to look into the government’s earlier plan to take the electricity, digital literacy, etc to the remote areas.
It would take ten years to make it happen. But you have to start making the plan ten years ahead, which the government has done.
One of the first initiatives was the Union Digital Center which we now have across the country. It was initially called Union Information Service Center and has since been renamed Union Digital Center. The whole concept was centered around making these services accessible to people who don't have access to devices and are not digitally literate. Union Digital Centers were the answer—people can come to these centers and take somebody's help to access these services. These services are designed for the masses.
Then came digital literacy. People have to be digitally literate to be able to use these services. There have been a lot of programs for digital literacy. There have been initiatives to include digital literacy in the education curriculum. For example, ICT is now being included as a subject in secondary education. The same is going to happen in the primary curriculum where students will be taught coding and other basic technology skills. The ICT Division and several other organizations have developed various skill development and digital literacy programs that are going on right now.
The second thing was the access to devices and affordable devices. That's where the Government's Made in Bangladesh initiative comes in. The thesis is that a Made in Bangladesh policy would encourage local manufacturing, which would, in turn, bring down the prices of products allowing companies to offer smartphones, laptops, and other electronics products at a cheaper price making them affordable for more people.
This has been a struggle for a long time. I have a personal experience here. When the Honorable Prime Minister ordered that we want to become a manufacturing hub for electronics products, our State Minister for ICT Division Mr. Zunaid Ahmed Palak MP asked me to research it and figure out what can be done.
We then sat together with all the prominent brands in the space such as Walton and others to understand why they import these devices instead of making them in Bangladesh.
The discussion helped us to identify several challenges. First, the tax structure for importing the parts to assemble a laptop was disproportionately high—the tax on each of these parts ranged from 33-99%, whereas import duty for these products was at 4-4.5%. Consequently, the cost of assembling was very high compared to importing at 4-4.5% import duty. That didn't make any sense.
We collected the data, did the research, and then presented it to our Honorable advisor to the Prime Minister of ICT Affairs Mr. Sajeeb Wazed Joy. He was furious when he saw it. He called NBR and other relevant stakeholders to Gono Bhaban. Palak bhai and we all went to the meeting. We did the presentation. He spoke with NBR. He explained why we want to become a manufacturing hub, how it will create a lot of employment opportunities, and why we need locally made Bangladeshi products to make the digital Bangladesh program successful.
We sat with NBR to identify the first set of products on which to reduce tax so that it could get started. We identified 94-95 items. They did the HSCode and reduced the tax to 1%. This was in 2017. The change has triggered a manufacturing boom ever since. After that Walton and everyone started to manufacture smartphones and laptops in Bangladesh.
We have designed incentives for these companies to manufacture locally so that people can have quality products in the local market at a cheaper affordable price. For example, if you can buy a good laptop between tk. 20k-25k and buy a good quality smartphone below tk. 10k, it is affordable for more people.
The third one is the internet. Very important. We know that the internet was quite expensive before. It has come down in the past few years. we're still working to bring down the pricing to an even more affordable range. Honestly speaking, although many people say that we need to further reduce the internet price, I think our current pricing is competitive with any other nation. But we have work to do to take the internet to rural Bangladesh. We have to be able to take the internet to the rural level with service quality as good as Dhaka city.
There are some challenges. Because when you give it to the private sector, the private sector works for business. If you don't have enough customers in the rural areas, the private sector would not be interested in going there. They would not have the incentive to go there and customers will not have the right support and services. So the Government has taken an initiative which will be implemented by Bangladesh Computer Council (BCC) under their project Info Sarker-3 to take the fiber optic network to the union level.
We have already been able to take the internet to several thousand unions. But there are many unions where there are rivers, mountains, and other major barriers where we could not take the fiber-optic network. We have taken several alternative projects that could cover these areas. For instance, probably we would have to provide internet coverage through Satellite to many places. So the plan is that the government will support taking the internet to every union across the country. we're creating these hubs. Once these hubs are ready, private sectors will then be able to serve individual villagers and provide a regular internet setup. we're now developing the business model so that it happens. We have already covered a large number of unions.
If we can put the internet, affordable devices, and digital literacy together, we can take these services to the masses.
we're making a huge effort to ensure that all these services are equally accessible to the disabled and specially-abled people. That is one of the mandates of the government that no one is left behind. Two of the major ambitions of our honorable Prime Minister are: no one is left behind and Amar gram, amar shohor “My Village , My Town”. we're trying to ensure that even people from remote and marginalized areas can access these services. At the same time, we're ensuring everyone regardless of their gender, social identity, and status can access these services.
Our state Minister Zunaid Ahmed Palak bhai has identified 3 groups of people we should consider when designing the citizen services. The first group of people is people who were born in the last twenty years or so—meaning when they were born there was already the internet, computer, smartphones, etc and they are tech-savvy. The second generation is the people who were born when there was no internet in Bangladesh. They had to learn and adapt. They have seen the internet revolution. They can adapt and learn but they are not as tech-savvy as the previous generation we mentioned. The third group is the people who are aged population. Adaptation among this group is relatively challenging and in some instances, not possible. Furthermore, there are people who are probably not that aged yet but are from such an economic and social background they don't have the literacy and education to use technology.
All our services are designed keeping these three groups in mind so that all three groups can use these services.
These are some of the strategies the government has taken to take the services to everyone.
Ruhul: How has your early life shaped who you are today?
Sami Ahmed: You are right in that our early life often leaves a lasting impact on who we become as individuals. My mother has played an important role in my life. She taught me that it is important to lead a principled life, embrace challenges and struggles, and work hard. I learned resilience from her. Growing up, I was involved in sports. For example, I was in the scouts. These things helped me develop leadership skills and discipline that have been tremendously useful throughout my career.
My father died when I was really young—I was 17/18 years old when I lost my father. My father passed away in 1995. After that being able to learn from life has been tremendously helpful for me. Life is the best teacher. If you are an attentive student and willing to learn, life teaches you all the important lessons you need to learn.
Ruhul: Government is a massive machine. we're used to criticizing how the Government functions for a lot of right reasons some of the time and other times probably not so. But from the inside, it has to be different. When you work as an insider, what are the challenges and difficulties you see when it comes to implementing these large-scale projects in areas like technology?
Sami Ahmed: The biggest challenge is the mindset. More than 99% of people who I have come across working in Government, be it bureaucrats or the political leadership, everybody has the same aim, they want to do good for the country. But they have different mindsets for which sometimes we face challenges. For example, startups and early-stage founders face challenges in many places such as NBR or the Bangladesh Bank. Many of these challenges are challenges of mindset. Many people have a traditional mindset and many people come up with radical new ideas. These two don’t go well together.
The second problem is that we inherited many of our laws and regulations from the British, which we didn't change to this day. Laws take time to change. We have had many reforms in the legal system in the past but we have more work to be done there. Since we're trying to leapfrog, this aged regulatory environment sometimes creates challenges. When you are surging ahead but your laws are changing slowly, that can hold you back and hamper your growth.
In order to progress, we need to seriously work on these two areas. The first is the mindset of people. If we can't change the mindset, we can't make any other changes happen because people will ultimately change the laws. If we can't change the mindset, how can we change the laws? The mindset of the highest level and the leadership is there, the mindset of the next level is also there, and then it goes to the field level where people will actually do the work, we have challenges of mindset in there. We have to work to bring everyone together so that we can actually have a target, have a goal, and collectively work to achieve that.
The government has taken several initiatives to address this challenge such as the Digital Leadership Academy that is in the making now. The purpose of the academy will be to run capacity-building programs for all levels of Government officers, political leadership, members of parliament, people who work in the rural areas, etc.
A lot of our challenges originate in our lack of understanding of reality. For example, blockchain, AI, and similar technological revolutions have made many things possible that we cannot perceive from a traditional mindset. To take advantage of these technologies, we have to understand them.
For that, we have to reform our current mindset and regulatory environment because they don't go along with the transformational change that the technology has brought about.
Ruhul: Coming back to your journey, you studied technology in the US and worked for the government and the country's eminent technology business association. Did you think in the early days of your career that you would eventually be working in tech and venture capital? Why did you decide to come into the VC world?
Sami Ahmed: No, absolutely not. However, I have always wanted to optimize my career for impact. I wanted to work in a place where I would have the opportunity to create a lot of impact, which is why I didn't start my own company. In my analysis, if I start my own business the impact will not be as big as working with the government and a national ecosystem. So creating impact has always been my ambition. In fact, that’s why I returned to the country.
The venture capital ecosystem happened just very fast. I have been working with startups in the sense that I have been helping them with policies, regulations, skill development, business development, etc. I have had that experience for a long time both from working with the government and as well as from my time at BASIS. The hardware-related policies that I mentioned and many other policies that have been developed in the last few years by the ICT Division, I have been involved in all of them. So I have deep expertise in that.
The biggest challenge for the startup ecosystem right now is these regulatory and policy challenges where we have a lot of work to be done. It is not about funding. If we don’t change these policies, the startup ecosystem will not grow. This is one of the main reasons I'm here.
Ruhul: Coming to your work as the Managing Director of Startup Bangladesh Limited. You mentioned a couple of important points such as looking into the border policy environment so that it is conducive for the startups to flourish and bridging the gap between policy state and the market reality and I think that is only a small part of what you do. To that end, could you offer us an insight into your work?
Sami Ahmed: The most important thing is the vision. we're aligned with the vision of the government and we help implement it. When I took the responsibility of Startup Bangladesh, I asked our state minister Zunaid Ahmed Palak, to give me a target that he would like me to achieve—what's my one goal. I was told that we want to see at least five unicorns in Bangladesh by 2025. Now I know the target and the vision. And as the MD of the Startup Bangladesh, my goal is to achieve that vision. we're now aligning all our work to achieve that target.
Startup Bangladesh is not a typical VC firm. Generally, VC firms are optimized for a higher return. The objective is to make winning investments and ensure 10x returns. They look at the investments through the lens of the potential return. If it is an impact fund, they will look into impact, but the goal is to have an outsized return.
The main mission of Startup Bangladesh, however, is to develop an effective ecosystem so that we have a good supply of startups, they are getting funding, and they are being able to connect with the global VCs. Our goal goes beyond making money.
I don't know how much people know about our honorable ICT advisor. He started his career in the mid-90s through startups. He started his own startup in Silicon Valley in the late 90s. He has been involved in the startup ecosystem for a long time. He is the one who told us that we have to grow the startup ecosystem in Bangladesh—you guys need to have some programs and need to do this and that, which Palak bhai started to implement later on.
From there, Honorable advisor to the Prime Minister of ICT Affairs Mr. Sajeeb Wazed Joy started to talk about how we have these fascinating startups in the country and how we can attract global VCs, which wasn’t happening at the time, to support these companies. That led to the idea of Startup Bangladesh Limited—create this company called Startup Bangladesh Limited and one of the major tasks of the company will be to work so that global VCs notice Bangladeshi startups and our companies can attract international investments. That was one of the main purposes of creating Startup Bangladesh Limited.
When we invest in a company, it is just the beginning of our work. Because if we want to have unicorns, we have to support these companies so that many of them have a chance to go big and some of them may even become unicorns. We have a lot of work to be done there such as guiding these companies and attracting other VCs to come in, that's where Startup Bangladesh needs to work so that we can create five unicorns by 2025.
Ruhul: How do you approach your work?
Sami Ahmed: The way we do it is inclusivity. I would not say it is my own way, but it definitely incorporates the best practices. we're a high ownership culture. Everybody takes ownership of their work. Everybody has goals. They know what to do. They set their OKR and KPIs and work hard to achieve them. Since people take ownership, things happen at their own pace.
The organization is structured a bit differently than a typical government organization where things are hierarchical and top-down. We have a flat horizontal management structure. We cooperate and collaborate.
On my first day, I told everybody about the kind of organization we want to create. Nobody in my team calls me Sir. Everybody is bhai (brother). We believe in the culture that we're all on the same team. We prefer round tables where we can sit together and discuss—although our conference table is designed differently.
Decisions are made collectively after listening to everybody. We encourage people to assume leadership. The idea is that everyone has to be a leader in guiding the organization.
That is basically my management philosophy and how I approach my work.
Ruhul: How big is the organization?
Sami Ahmed: Currently, we're a 12-member team. We have outside partners who do due diligence, legal diligence, etc for us. These works will eventually be done within the company. But since we're a new company, building these skills in-house will take some time. In that case, we may become a 20-person team in the next one or two years. Our organogram has approval for almost 50 people.
Ruhul: How big is the fund? How is the fund structured? What are the plans with the fund? Do you want to expand it? Today, you are a government fund, do you want to raise external funds in the future or will it remain a government fund?
Sami Ahmed: A couple of things here. First of all, we're working with the BDT 500 crore plan that our Honorable Prime Minister announced for startups. We have been given BDT 100 crore with which we have started the ShotoBorshe Shoto Asha (A Century of Million Dreams) campaign. Our target is to make a total of 50 investments with this BDT 100 crore within the next one year. Investments don’t necessarily have to be new startups, there could be follow-on investments. Then we will do the next BDT 100 crore and so on. We plan to invest in the BDT 500 crore fund by 2025. This is a government-only fund.
we're thinking about raising funds from the private sector, other VCs, and organizations to create a fund for co-investment. We don’t need external funds but we want to do it anyway to help the ecosystem grow. We have already started talking with different organizations.
If you look at the startup ecosystem in Dhaka, the local investment in our startups is low compared to foreign funding. We sat together with stakeholders including high net-worth individuals to understand why this is the case.
There is a lack of understanding regarding how startup funding works. People have a lot of questions—how the valuation works, the right approach to valuation, why some startups ask for exorbitant valuation which doesn't seem right to many people, etc. People also have questions about the high-risk nature of startup investing.
So we're proposing that let's create a fund together, startup Bangladesh will manage the fund and we’ll invest together. So far, our track record has been excellent. Our first vintage investments have seen a 3x growth in one year. Given the track record, a lot of people have shown interest.
Our interest is to grow the ecosystem where people are comfortable investing in local startups. Today, when a startup goes to a corporation, they think traditionally. They think about the money they will invest, and rarely see the value of an idea. People don't understand the IP value of ideas. They look at the asset you have and your actual product. Consequently, when founders go to people with an idea, they don’t know how to evaluate that.
The second misconception is that many people think that since I'm giving the money, I should have 50%+ ownership of the company, which is not the right approach. If you take away this much of the company in the seed round, raising later rounds of investments will be difficult. There is a lack of understanding in the market about how startup investment works. we're stepping in so that we can help build understanding and confidence in the market. We want to build this local ecosystem of funding.
The other plan is to raise global funds. we're talking with several global investors and exploring opportunities. we're thinking about how we can work with non-resident Bangladeshis (NRBs). We have many NRBs across the world who want to invest in the startup ecosystem in Bangladesh. we're looking into how we can make it easier for them to do so. Similar to local investors, we're thinking of an NRB fund where NRBs can invest and we invest together.
All these are just in discussion. It has barely been two months since I joined but there are things like these in the plan.
Ruhul: These are some interesting developments. As you mentioned, as an organization you are different from the traditional VCs. You are not in this for money alone. And also, we have seen your investment style is different from regular VCs. You have been investing in batches. What is your investment thesis? For instance, A16Z, one of the prominent VCs in the world, started with the thesis that software is eating the world. That sort of gave an underlying structure for their investments in those early years. Do you have anything equivalent where there is this big idea and insight that drives your investments?
Sami Ahmed: Yes, absolutely. Let me go back a little to give you an understanding of the thesis.
we're driven by the philosophy of the government and the honorable Prime Minister Sheikh Hasina and her ICT advisor. The government has a plan for 2041—where we want to see Bangladesh in 2041.
Until now we had the Digital Bangladesh vision, which we have been able to achieve in 2021. The next thing that is coming up is Smart Bangladesh 2041. The details will be communicated from the Government soon. To achieve the Smart Bangladesh 2041 goals, our Government has some high-level target areas, which is the basis for our thesis. For example, if you look at our major industry focus at Startup Bangladesh, we're into ed-tech, agri-tech, healthcare, e-commerce, financial services, cyber security, Entertainment and lifestyle, AI/Deep tech, etc. These are our major industry focuses where we're investing right now.
To that end, we support startups that go along with that ambition and vision of the Government. To put it differently, we invest in startups that can create employment and impact the country. That's our priority.
Our ICT advisor has asked us to focus on 4 areas: cyber security, AI, chip design, and robotics. These are huge industries globally and have huge potential going forward. These four are major issues for our national securities. we're interested in startups that are working in these areas.
In a nutshell, we're interested in companies that are addressing national priorities and contributing to nation-building.
Ruhul: That makes a sound thesis. The government has certain nation-building goals and objectives and Startup Bangladesh wants to back companies that are contributing to achieving those objectives.
Sami Ahmed: Yes. Companies that will help us to become a Smart Bangladesh in 2041 and become a developed country.
Ruhul: How do you find and solicit startups to invest and how do startups find you?
Sami Ahmed: If you look at the ecosystem that the ICT Division has built, it has a structure. It is a complete ecosystem. As you can see here (showing a slide deck), we work with startups from all stages. There is the ideation stage, acceleration stage, and expansion stage. The expansion stage is where Startup Bangladesh comes in. We invest in growth-stage companies and support them to grow. We provide board-level support, VC networking, growth funding, fundraising support, etc. we're doing all those things. We also get involved in the acceleration stage, where we do some early-stage seed funding.
The High Tech Park is there. They support these companies with infrastructure that startups can use.
The early-stage work, however, begins at the ideation stage where the ICT Ministry has a project called the IDEA project. The IDEA project supports idea-stage startups with grants and other benefits. From the idea stage, it goes to the acceleration stage where we do some seed funding. And in the expansion stage, we make the investments and provide other support to really expand.
Ruhul: This is fascinating. So you have your internal pipeline?
Sami Ahmed: Yes. Within the government network, we have a pipeline and it is working. For example, when this program started in 2017, Shopup was one of the first startups that got the BDT 10 lakh investment from the iDEA program. There are several other successful examples.
A large number of startups go through these stages, which also offer a fascinating insight into the overall ecosystem.
Ruhul: I could see some of your investee companies went through the IDEA project.
Sami Ahmed: Yes. The government already has a pipeline and we get a lot of startups through this internal network. Apart from that, we also get suggestions from the ecosystem. There are local angel networks, investors, and VCs, and there are organizations like Future Startup, and LightCastle, we have a startup consortium, we collaborate with everyone and get recommendations from them. And often we see overlap between companies in our own pipeline and the recommendations we receive.