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Startups are doing relatively well in Bangladesh but the success rate is not quite satisfactory because of various problems, including regulatory issues, speakers told a seminar on Saturday.
The regulatory issues include a lack of access to finance, an age-old valuation process, and a lack of private equity and incubation, they told the programme organised by Dhaka Chamber of Commerce and Industry (DCCI) at its auditorium in the capital.
Startups can be a great economic enabler for Bangladesh but a startup-friendly ecosystem has not been substantially equipped in the country yet, said DCCI President Rizwan Rahman.
He said Bangladesh currently has over 1,200 active startups and around 200 new ones are launched every year.
The startups had invested around $800 million and created 1.5 million formal as well as informal jobs in the last decade, he further said.
Rizwan added the government had taken various initiatives to strengthen the startup ecosystem, including establishing a venture capital firm, 28 high-tech parks, and data centres. “The securities regulator also drafted rules for small-cap companies in 2022.”
Addressing the seminar as the chief guest, Senior Secretary of the ICT Division Zeaul Alam said, “Taking the urgency of a smooth ecosystem into account, we need to create startup incubation centres of international standards and startup pioneers.”
“We also need to arrange expert consultations, startup exhibitions, networking, mentor development, and low-cost financing options with necessary regulatory reforms, including industrial and export policies, fiscal policy, and foreign exchange regulation and SME policies.”
He said the government was working hard to create a startup ecosystem in the country through various initiatives and technical centres were being established.
Startups would get a space in hi-tech parks in upazilas, meaning there would be ample opportunities for them, Zeaul said.
He further said, “We indeed have many challenges, but we need to overcome them. The government has taken the initiative of formulating a draft startup policy.”
A payment gateway platform named Binimoy would be launched soon under the initiative of the government, he said, adding data protection is an important element of an effective ecosystem of startups.
Bangladesh Securities and Exchange Commission Commissioner Dr Shaikh Shamsuddin Ahmed said SMEs and startups were given priority in the recent industrial policy.
“But we need to enhance regulatory collaborations among all agencies at the operational level. A few changes are coming into effect based on reality, but we need to improve the valuation system for startups.”
He further said, “We are heading towards the fifth industrial revolution, and we need an easy valuation process as well as an established IT framework.”
Shamsuddin also said the regulators need to be more cooperative with startups to mitigate financial problems.
Ambareen Reza, chief executive officer and managing director of Foodpanda Bangladesh, said startup success stories would ensure trust and that would encourage others to come into this sector. “We need investment in fintech and logistics.”
Nirjhor Rahman, chief executive officer of Bangladesh Angels, said, “Liquidity is the key thing in this sector, and we have to ensure investment as well as working capital for new startups.”
He said Startup Bangladesh is a good initiative of the government and more investment would come if the valuation process is simplified.
“Startups are enabling the digital transformation of Bangladesh. They help SMEs by creating market access, accelerating fintech, adopting technology, and enabling mobility,” said Fahim Ahmed, chief executive officer of Pathao, in his keynote.
The regulatory framework, policies, limited human capital, technology, finance, and accessing the international market are some of the challenges in this sector, he said.
