Tech investment to witness double-digit growth this yr

Jannatul Islam

10 January, 2021 12:00 AM printer

Tech-enabled businesses and startups in Bangladesh are expected to see double-digit growth in investment this year, market insiders have said.

In 2021, the tech-enabled businesses including startups and companies in hi-tech parks are expected to raise around $450 million collectively as researchers predicted 10 per cent growth over $400 million investment in 2020.

The government has been providing policy support to bring the investment through establishing hi-tech parks as technology-based economic zones across the country.

Talking to the Daily Sun, ICT Division Senior Secretary NM Zeaul Alam said the government has been focusing on scaling up the tech industry through establishing hi-tech parks and providing investment support through venture capital system.

“Tech companies started operations in hi-tech parks in Sylhet, Rajshahi and Kaliakoir in Gazipur. We are hopeful about a rise in tech investment from home and aboard in those specialized economic zones,” said the senior secretary.

He also mentioned that the ICT division has continued mentoring and promoting innovative businesses through different programmes under Startup Bangladesh.

Officials of Bangladesh Hi-Tech Park Authority (BHTPA) said most of the promised investment in 2020 will come into reality in 2021 as the firms are expected to start operations in respective areas.

BHTPA Managing Director Hosne Ara Begum said the hi-tech parks are ready to attract investment in 2021 from local and international firms as a continuation of the outgoing year.

“Orix Biotech will start operations in Bangabandhu Hi-tech City in Gazipur this February as part of their promised investment of $300 million for developing plasma plant. Besides, Sony-Rangs will set up mobile assembling plant very soon. United States-based company JS International is also keen to invest in Bangladesh in hi-tech parks,” Secretary Hosne Ara Begum told the Daily Sun.

According to the official, local electronics company Walton will sign an agreement with the BHTPA soon for space allocation in the Bangabandhu Hi-tech City in Gazipur.

In the first week of the year, the specialised body under the ICT Division has signed agreements with two companies – Think Group and Fair Technology – which are considered as a significant achievement for the year.

Besides, the newly emerged concept called ‘startup’ system will also raise fund through venture capital-based finance.

Venture Capital and Private Equity Association of Bangladesh (VCPEAB) President Shameem Ahsan said the fund managers and investor platforms will promote ‘impact investment in 2021.

“We believe in generating profit with a purpose and use technology for the greater good, especially after the corona pandemic situation. Previously, investors would measure the risk and return of a business to understand its prospect. Global investors are now measuring risk, return, and impact. Nearly $2 trillion impact investments are being mobilized globally and we want our local startups to become environment, society and governance (ESG) conscious companies in 2021 and bring a substantial chunk of that investment in the country,” Shameem, also managing director at eGeneration, told the Daily Sun.

LightCastle Partners has been researching business and technology for a couple of years. Regarding the investment projection in 2021, LightCastle Partners chief executive Bijon Islam said the country has experienced recovery in Startup Investments especially towards the end of the year with ShopUp raising $22.5 million from Sequoia Capital and Flourish Ventures, bringing the total investment for the year to $40 million.

“We can expect growth momentum in 2021 both from international and local investors including Startup Bangladesh Limited - the signature venture capital firm from ICT Ministry,” he said.

For investors in hi-tech parks, the government provides 20 services through digital one-stop service(OSS) platform of BHTPA to attract more investment form local and international ventures. The services include project registration, land allotment, space allotment, project clearance, visa recommendation, visa assistance, work permit, local purchase permit, local sales permit, space billing and name clearance.

The government has planned to establish 28 tech parks across the country to transform the labour-based economy to a knowledge economy driven by connectivity.

Of which, five hi-tech parks are ready for local and international investment.