ICT Division seeks Tk 50cr for Startup Bangladesh Co
The ICT Division has decided to write to the finance ministry and seek Tk 50 crore for Startup Bangladesh Company Ltd (SBCL) after the government gave its nod to the new company to give a boost to budding businesses.
SBCL will get the fund from the Tk 100 crore the finance minister has allocated for startups in the budget for the current fiscal year.
The cabinet gave the final nod on the memorandum of the articles of SBCL on Monday.
“The government has secured Tk 100 crore for startups but we haven’t had much of time to spend all of the money. So, we are going to take Tk 50 crore from the allocation,” Zunaid Ahmed Palak, state minister for ICT, told The Daily Star.
The government has targeted to bankroll 1,000 startups. As part of the plan, the ICT Division has already provided Tk 7 crore to 126 start-ups as a grant and has received another Tk 4 crore for them for the second round of funding.
“We have also selected another 115 startups for funding,” Palak added.
From the expected fund, SBCL is planning to provide Tk 10 lakh initially as seed money to each of 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 nature, a 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, officials of the proposed company said.
The government started to work with startups in 2016 and now the initiative has taken a shape.
“Our ultimate target is to develop an entrepreneurial startup culture in the country. That’s why we are funding good number of companies,” Palak said.
“If only a single company can hit the global market from this basket, it will be huge for the country.”
So far, the Startup Bangladesh project has disbursed funds as grants to the startups but in the next phase of the funding, it will own share in the companies, ranging from 5 percent to 49 percent depending on the valuation, according to Syed Mujibul Haq, project director of the Innovation Design and Entrepreneurship Academy (iDEA) under the ICT Division.
At SBCL, there will be 36 employees and it will have a government-appointed board led by the secretary to the ICT Division.