Success rate of startups to pave way for others: Speakers

Speakers at a seminar on Saturday said the success rate of startups would pave the way for others to come in the competitive market.

They said although startups are doing relatively well in Bangladesh, but the success rate is not quite satisfactory because of various problems including regulatory issues like lack of access to finance, age-old valuation process, lack of private equity and incubation.

The speakers said this while addressing a seminar on “Journey of CMSMEs from startup to scale up: prospects & challenges” organised by Dhaka Chamber of Commerce and Industry (DCCI) on Saturday.

Speaking at the seminar as chief guest, Senior Secretary of the ICT Division NM Zeaul Alam said CMSMEs and startups directly or indirectly create a large number of employments.

Although there is a failure rate in the startups but it’s not making any loss rather it is a learning for future endeavours, he said.

The Senior Secretary said that the government is working hard to create a startup ecosystem in the country through various initiatives.

“Technical centres are being established in the upazila level where startups will get space to work side by side in the hi-tech parks. There will be ample opportunities for startups,” he said.

The government has taken an initiative for formulating a draft startup policy, he said, adding: “A payment gateway platform under the initiative of the government named “Binimoy” will be launched soon. Data protection is also an important element for an effective ecosystem of startups.”

While speaking as special guest, Dr Shaikh Shamsuddin Ahmed, commissioner of Bangladesh Securities and Exchange Commission (BSEC), said that in the recent industrial policy SME as well as startups got much priority.

“But, we need to enhance the regulatory collaboration among all the agencies at the operational level. Based on the reality few changes are coming into effect but we need to improve the valuation system for the startups. The more we are heading towards the fifth industrial revolution, the more we need an easy valuation process,” he said.

Shamsuddin said to mitigate financing problems, private equity, venture capital and angel investors can play a vital role if the risks can be rationalised in this sector.

DCCI President Rizwan Rahman said startups can be a great economic enabler for Bangladesh. A start-up friendly ecosystem in the country has not been substantially equipped, he added.

In the Global Startup Ecosystem Index 2022, Bangladesh ranks 93 out of 100 countries. The Startup index also claimed that financing and dearth of policy support are the root causes of weak startup growth in developing economies including Bangladesh, he mentioned.

He also informed that Bangladesh currently has over 1200 active startups and around 200 new startups join the industry every year which made around $800 million investment and 1.5 million formal and informal jobs in the last decade.

The DCCI president mentioned that the government has meanwhile taken various initiatives to strengthen the startup ecosystem including establishing a venture capital firm, 28 high-tech parks, data centres as well draft rule for small-cap company 2022 by BSEC.

Taking this urgency of smooth ecosystem into account, Rizwan said there is a need to create International standard startup incubation centres, startup pioneers, expert consultation, startup exhibition, networking, mentor development, low-cost financing options with necessary regulatory reforms including Industrial policy, Export policy, Fiscal policy, Foreign Exchange Regulation and SME policy and others.

Ambareen Reza, CEO and Managing Director of Foodpanda Bangladesh Limited, said the success stories will ensure trust while trust will facilitate others to come in this sector.

“We need investment in the fintech and logistic areas,” she added.

Nirjhor Rahman, CEO of Bangladesh Angels, said liquidity is the key thing in this sector. “We have to ensure investment and working capital for new startups.”

Tanveer Rashid, Director of Finance, Chaldal Limited said that government’s Startup Bangladesh is good initiative. “If the valuation process is simplified, more investment will come,” he added.

Tanveer also stressed the need for addressing the barriers to get finance.

Fahim Ahmed, CEO of Pathao, presented the keynote paper. He said that Startups are enabling the digital transformation of Bangladesh.

“Startups are helping SMEs through creating market access, accelerating Fintech, adopting technology and enabling mobility. Regulatory framework, policies, limited human capital, technology, finance and accessing international market are some of the challenges for this sector which need to be addressed,” he added.