Saturday, 1 October, 2022
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Start-ups board for capital market on the cards

Bangladeshi startups have raised a total of $750m in last 10 years with foreign investors providing 95pc

Start-ups board for capital market on the cards

Bangladesh Securities Exchange Commission (BSEC) is working to introduce a separate board for start-ups to help them raise fund from the bourses.

“This is now under process. A commissioner is designated to evaluate it,” Prof Shibli Rubayat-Ul-Islam, chairman at BSEC, told the Daily Sun.

“After assessment, the commissioner will inform the BSEC. Then we will ask the CMRRC department to formulate a law for the new broad,” he added.

BSEC chairman said the stock regulator will welcome investors considering risk factors of the new type of businesses like start-ups. “Such business is different from other types of business as 67 percent initiatives fail. So the financial evaluation is a priority for their inclusion,” he said.

This new type of businesses has attracted the stock regulator as Bangladeshi startups have raised a total of $750 million in last 10 years, with foreign investors providing 95 percent.

BSEC Commissioner Dr Shaikh Shamsuddin Ahmed said that the process of start-up board is now at its early stage.

He said the commission is now working on processing and evaluation for the inclusion.

“The commission is now equipped with technology and can form such a board. We think this will ease the process and the star-ups can raise the fund through the board,” said Dr Shamsuddin.

“There are some companies (start-ups) which have already communicated with us. We are working together with BIDA. The investment agency (BIDA) has also a interest in start-ups segment. It’s a priority area for us. We hope the board will come into light soon,” he said. 

Velocity Asia Managing Director Shawkat Hossain said the separate board for start-ups will help the local ventures grow.

“There are some hurdles for start-ups to raise fund from bourses. One of these is profit making ledger for two years. It’s pledged to amend the point to ease the investment in the potential sector,” Shawkat Hossain, a former banker, told the Daily Sun.

Former president of Bangladesh Association of Software and Information Services (BASIS) Fahim Mashroor, however, thinks there is no need for a separate board for startups and instead the existing SME board should be made active.

“We should popularise the SME board rather than having a new one for start-ups. The start-ups can be included in the SMEs with special criteria,” he said.

Fahim Mashroor, the chief executive of bdjobs.com, said, “In Bangladesh, the start-ups are not ready to enter the bourses. There should be an independent valuation of respective ventures maintaining international standards.”

Venture Capital and Private Equity Association of Bangladesh (VCPEAB) Chairman Shameem Ahsan has welcomed the initiative saying that the board for startups can be a turning point for the startup ecosystem.

“However, the policies have to be startups and tech sector friendly,” he emphasised.

Shameem, a general partner of Pegasus Tech Venture, said, “Loss-making startups with high growth potential should be allowed to get listed and investors need to have a long-term investment appetite.

Some 78 Bangladeshi firms received capital through 146 finance arrangements, of which 80 were published as of February 2021, according to a report of Light Castle Partners.