The government of Bangladesh is set to form a specialised firm to fund and nurture startups and ICT entrepreneurs under the Innovation Design and Entrepreneur Academy of the ICT division with the view to encouraging innovative ventures.
All the preparatory work and formalities have been completed a few months back, Zunaid Ahmed Palak, state minister of the ICT division told The Daily Star on Thursday. The proposal will be placed in the next cabinet meeting.
“We are trying to establish a startup culture in Bangladesh and to achieve that goal this company can play a huge role.”
According to a report by Muhammad Zahidul Islam in The Daily Star, the government has targeted to set the wheels rolling for about 1,000 startups.
To be called Startup Bangladesh Company Limited, the firm’s paid-up capital would be Tk 500 crore. Its initial target would be to provide Tk 10 lakh each as seed money to about 200 local startups.
A start-up is a young company founded by one or more entrepreneurs in order to develop a unique product or service and bring it to market. By its nature, the typical startup tends to be a shoestring operation, with initial funding from the founders or their families. Typically, banks are not comfortable with investing in digital service companies as they have no fixed assets and carry higher chances of not turning out to be economically viable ventures, said officials of the proposed company.
“Venture capital can make these bold ideas successful and that is why we are investing in them,” said an official requesting anonymity.
Some 36 employees will be appointed in the company that will have a government-appointed board led by the secretary of the ICT division, according to the proposal.
The proposal was sent by the ICT division last month to the cabinet division, based on which a Tk 100 crore allocation was made in this year’s budget to this end.
“It will take some time to get that money but we have some funds of our own to get the company rolling,” Palak said. 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.
“We are trying to create a culture of tech companies here and that’s why we are taking the lead. If we can produce just one world-leading startup it would be good enough for us,” Palak added.
A few hundred applications have been received since Startup Bangladesh has been formed as a project in 2016 and some has been shortlisted for funding. Once due diligence and some other formalities have been completed they will get their funding.