Published: 12:00 AM, 01 October 2016
Startup culture in Bangladesh on the rise
Needs collaboration and investment
A connecting startups participant pitching about his startup portfolio in front of judges. A startup company or startup is an entrepreneurship or a new business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model. Due to this background, many consider startups to only be the tech companies, but this is not always true: the essence of startups has more to do with innovation, scalability and growth.
The concepts come up with a revolution across the world in recent years. Specially the enthusiasm of the youth of developing countries in that context very effectively. Comprising with the other countries Bangladeshi youths are excel in innovation and advanced in business initiatives to take. Bangladesh has a particular landscape in startups. Having enthusiastic young generation and skilled manpower of Bangladeshi entrepreneurs are working hard to overcome boundaries and cross their limits to grasp the utmost glory of success. Bangladesh is an emerging market to grow having talent and labor pool with technological ideas and innovation. Tech companies that take root in Bangladesh can easily look to neighboring countries at the time of expansion.
Bangladesh is a mobile-first nation, with more than 150 million mobile subscribers and over 25 percent Internet penetration. With 70 percent of the population under 35, media consumption is increasingly skewed towards digital. Entrepreneurship is growing and encouraging herewith as priority. Though it is not so easy for the startups to grow and success addressing the exiting problem to solve.
Solving local problems
Entrepreneurship is not easy in Bangladesh as it need the courage and dedication to face the challenges along with the innovative ideas to execute. Beside individual skill it required a perfect environment, investors or fund and a team to support innovation or help to implement the plan accordingly.As reference we have some success stories to share which came up with innovative idea and execution plan and became success. bKash, Bikroy, Magneto Digital, Boomerang Digital, Light castle partners, Shuruhok.com, Kokhon.com, Cholo.com.bd, Go Traffic, NewsCred, (etc) are some of those innovative business that has made sense in startups . most of that success doesn't necessarily come from breakthrough innovation, but from flawless execution.
Talking about bkash(Mobile Banking), it is One of the best example to connect the millions of people who were unbanked in Bangladesh. More than 70 percent of the Bangladesh population lives in rural areas where access to formal financial services is difficult. So it was a challenge connects this large population in business that has been solved by the innovative execution of bkash. This mobile banking service became milestone in our financial industry and solved a challenge for the startups specially those involving with online entrepreneurship.
The country's existing infrastructure also provides opportunities to build new businesses. According to Minhaz Anwar, Co-Director, The Founder Institute in Bangaldesh, "many of the startups in Bangladesh that have achieved success had to face the domestic challenges first then move to regional afterwards."
Startup scenario in Dhaka
Bangladesh taking technology as a tool to be the middle income country by 2021 and be a developed one by 2041. With the vision to transform the country into "Digital" the government working to develop its infrastructure across the country through internet connectivity. Online classified marketplace, job sites, food delivery service, gaming, online grocery and mostly e-commerce takes the lead in terms of drawing investments in Startups.Bikroy, Chaldal, Daraz and Ekhanei have secured a significant amount of investments from funds in the Silicon Valley, Switzerland and Germany but the local companies straggling for money as the business leaders not interested to invest the startups. Currently there are over 800 IT and ITeS (Information Technology enabled Service) companies registered in Bangladesh with an estimated total industry turnover of around US$200 million. Nearly 76 percent of these companies are involved with customized application development and maintenance. Dhaka has the most thriving startup community in Bangladesh because it has the highest number of universities, easy access to 3G services and other forms of technology.
Need tax holiday for investing in startups:
Setting up a private limited company is not too complicated to do. A company can be formed in just following five to six simple steps and the registration process in Bangladesh. It could be started off with taking a trade license in three to seven days at most, the experts explain. Currently software companies enjoying a tax holiday and in this year's budget, the Information and Communication Technology (ICT) sector has recommended to continue to extend, Meanwhile, the government is trying to promote general awareness about the importance of the digital ecosystem to connect millions of people. Regarding this M Fayaz Taher, CEO, Fortuna and Co-founder, SDAsia said, "The government should provide a tax break for investing in startups and there should be a separate tax policy for startups with a clear and well-defined definition of a startup entity. The registration process should also be eased."
The investment scenario in Bangladesh is evolving, as more and more sustainable businesses are coming into play and high net worth individuals locally are getting attracted to the ecosystem. Traditionally, the country saw investments from friends and family but now there is an informal, local angel investment network which mainly invests in tech startups within the range of US$10,000 to US$50,000.
Rising e-Commerce
The prospect of e-commerce has not yet settled in on, but it still holds vast potential. As soon as people address the advantages and convenience of shopping or trading online, it is believed that industry would boom. There is a huge potential market untapped and would use that to our full advantage.
In Bangladesh there is a massive Internet user base of above 4.2 crore, which is growing every year with a double-digit growth potential. These people are capable of spending 700 to 800 taka with a disposable income of average 25,000 to 30,000 taka. So they are our customers because they had the knowledge of Internet and the money to spend. There are a lot of opportunities in the market because currently the market is operating on only from 6 to 7 million. Most of the e-commerce sites depend on Google and Facebook to acquire customers. The Facebook users aging from 20 to 65 years of age group, there is 70 to 75 lakh audience. Top e-retail businesses are generating a sale of over 2-3 lakh every day just by using this target group. Sooner or later the market will go big with the Internet penetration and access to high speed Internet. e-Commerce startup like Esho, AjkerDeal, Akhoni, Aponzone, Sohoz, Branno, Jokhon Tokhon, Begum. co, Ghuri, Ebiponee and many others doing very well the e-Commerce arena of Bangladesh.
Lack of capital
Though the market is evolving and funds from the Silicon Valley, Middle East, UK, Singapore, Hong Kong and Australia have shown interest in Bangladesh's tech sector. Fenox VC has undertaken an initiative to put together a US$200 million fund for helping local and global entities to invest in IT startups emerging from Bangladesh. Apart from the funding, Fenox intends to come down to the ground and nurture, develop and grow Bangladeshi companies while connecting them to the right strategic players.
Lack of meaningful networks:
A good network is very crucial to build a successful business. Most of the times you make your first sell in your close network. From there you need to grow. You can find the right people from social media. It's easy to get connected via facebook or linkedin. But networking just doesn't only mean getting connected. Regular interaction is very important. It's a common perception that people may get irritated if you send them a mail. But if your mail or query got some merit people will actually love it. Again it's a two way thing. You need to add some value too.
A good network will help startups getting mentors, connect you with investors and moreover will help you selling your product.
Connecting startup program
With the aim to find out the best Startups of the country, and to nurture and enable them to develop and achieve their goals, Connecting Startups has listed its top 50 startups.From the top 100 in the "Idea and Product Category', these 50 startups were selected out of which 10 will be finally selected in July.State Minister for ICT Division Junaid Ahmed Palak said, "I have personally seen all of the projects. I sincerely hope they get the recognition they deserve." The top 10 Startups will be given free dedicated office space and dedicated mentorship and accelerator support for one year, whereas the other top 40 Startups will be given provision to use the co-working Space. All these 40 Startups will enjoy 3 months worth accelerator support.
Encouraging news for startups
Bangladesh Bank (BB) offers a $500 million special fund for local large/medium-sized firms to get foreign currency loans at around 4% interest rate. The existing interest rates in the local banks are upward of 10%. This declaration will help the entrepreneurs in long term financing for eligible firms.This decision was taken after World Bank (WB) announced a $300 million fund for Bangladesh Bank to give loans to private companies (export-oriented garments, footwear industries, and leather manufacturing industries, and light engineering sectors). This new fund from Bangladesh Bank will expand long term financing option in Bangladesh. For instance, last year, only 30-35 of the 6000 eligible firms received dollar-based long-term financing.
Finally , to be success as startups the entrepreneurs need to have a good network, environment friendly venture capital along with individual capacity & dedication. We have the opportunity and the market to take challenge and meet it successfully. Positive awareness and community encouragement will also enhance the startups movement as a whole.
The concepts come up with a revolution across the world in recent years. Specially the enthusiasm of the youth of developing countries in that context very effectively. Comprising with the other countries Bangladeshi youths are excel in innovation and advanced in business initiatives to take. Bangladesh has a particular landscape in startups. Having enthusiastic young generation and skilled manpower of Bangladeshi entrepreneurs are working hard to overcome boundaries and cross their limits to grasp the utmost glory of success. Bangladesh is an emerging market to grow having talent and labor pool with technological ideas and innovation. Tech companies that take root in Bangladesh can easily look to neighboring countries at the time of expansion.
Bangladesh is a mobile-first nation, with more than 150 million mobile subscribers and over 25 percent Internet penetration. With 70 percent of the population under 35, media consumption is increasingly skewed towards digital. Entrepreneurship is growing and encouraging herewith as priority. Though it is not so easy for the startups to grow and success addressing the exiting problem to solve.
Solving local problems
Entrepreneurship is not easy in Bangladesh as it need the courage and dedication to face the challenges along with the innovative ideas to execute. Beside individual skill it required a perfect environment, investors or fund and a team to support innovation or help to implement the plan accordingly.As reference we have some success stories to share which came up with innovative idea and execution plan and became success. bKash, Bikroy, Magneto Digital, Boomerang Digital, Light castle partners, Shuruhok.com, Kokhon.com, Cholo.com.bd, Go Traffic, NewsCred, (etc) are some of those innovative business that has made sense in startups . most of that success doesn't necessarily come from breakthrough innovation, but from flawless execution.
Talking about bkash(Mobile Banking), it is One of the best example to connect the millions of people who were unbanked in Bangladesh. More than 70 percent of the Bangladesh population lives in rural areas where access to formal financial services is difficult. So it was a challenge connects this large population in business that has been solved by the innovative execution of bkash. This mobile banking service became milestone in our financial industry and solved a challenge for the startups specially those involving with online entrepreneurship.
The country's existing infrastructure also provides opportunities to build new businesses. According to Minhaz Anwar, Co-Director, The Founder Institute in Bangaldesh, "many of the startups in Bangladesh that have achieved success had to face the domestic challenges first then move to regional afterwards."
Startup scenario in Dhaka
Bangladesh taking technology as a tool to be the middle income country by 2021 and be a developed one by 2041. With the vision to transform the country into "Digital" the government working to develop its infrastructure across the country through internet connectivity. Online classified marketplace, job sites, food delivery service, gaming, online grocery and mostly e-commerce takes the lead in terms of drawing investments in Startups.Bikroy, Chaldal, Daraz and Ekhanei have secured a significant amount of investments from funds in the Silicon Valley, Switzerland and Germany but the local companies straggling for money as the business leaders not interested to invest the startups. Currently there are over 800 IT and ITeS (Information Technology enabled Service) companies registered in Bangladesh with an estimated total industry turnover of around US$200 million. Nearly 76 percent of these companies are involved with customized application development and maintenance. Dhaka has the most thriving startup community in Bangladesh because it has the highest number of universities, easy access to 3G services and other forms of technology.
Need tax holiday for investing in startups:
Setting up a private limited company is not too complicated to do. A company can be formed in just following five to six simple steps and the registration process in Bangladesh. It could be started off with taking a trade license in three to seven days at most, the experts explain. Currently software companies enjoying a tax holiday and in this year's budget, the Information and Communication Technology (ICT) sector has recommended to continue to extend, Meanwhile, the government is trying to promote general awareness about the importance of the digital ecosystem to connect millions of people. Regarding this M Fayaz Taher, CEO, Fortuna and Co-founder, SDAsia said, "The government should provide a tax break for investing in startups and there should be a separate tax policy for startups with a clear and well-defined definition of a startup entity. The registration process should also be eased."
The investment scenario in Bangladesh is evolving, as more and more sustainable businesses are coming into play and high net worth individuals locally are getting attracted to the ecosystem. Traditionally, the country saw investments from friends and family but now there is an informal, local angel investment network which mainly invests in tech startups within the range of US$10,000 to US$50,000.
Rising e-Commerce
The prospect of e-commerce has not yet settled in on, but it still holds vast potential. As soon as people address the advantages and convenience of shopping or trading online, it is believed that industry would boom. There is a huge potential market untapped and would use that to our full advantage.
In Bangladesh there is a massive Internet user base of above 4.2 crore, which is growing every year with a double-digit growth potential. These people are capable of spending 700 to 800 taka with a disposable income of average 25,000 to 30,000 taka. So they are our customers because they had the knowledge of Internet and the money to spend. There are a lot of opportunities in the market because currently the market is operating on only from 6 to 7 million. Most of the e-commerce sites depend on Google and Facebook to acquire customers. The Facebook users aging from 20 to 65 years of age group, there is 70 to 75 lakh audience. Top e-retail businesses are generating a sale of over 2-3 lakh every day just by using this target group. Sooner or later the market will go big with the Internet penetration and access to high speed Internet. e-Commerce startup like Esho, AjkerDeal, Akhoni, Aponzone, Sohoz, Branno, Jokhon Tokhon, Begum. co, Ghuri, Ebiponee and many others doing very well the e-Commerce arena of Bangladesh.
Lack of capital
Though the market is evolving and funds from the Silicon Valley, Middle East, UK, Singapore, Hong Kong and Australia have shown interest in Bangladesh's tech sector. Fenox VC has undertaken an initiative to put together a US$200 million fund for helping local and global entities to invest in IT startups emerging from Bangladesh. Apart from the funding, Fenox intends to come down to the ground and nurture, develop and grow Bangladeshi companies while connecting them to the right strategic players.
Lack of meaningful networks:
A good network is very crucial to build a successful business. Most of the times you make your first sell in your close network. From there you need to grow. You can find the right people from social media. It's easy to get connected via facebook or linkedin. But networking just doesn't only mean getting connected. Regular interaction is very important. It's a common perception that people may get irritated if you send them a mail. But if your mail or query got some merit people will actually love it. Again it's a two way thing. You need to add some value too.
A good network will help startups getting mentors, connect you with investors and moreover will help you selling your product.
Connecting startup program
With the aim to find out the best Startups of the country, and to nurture and enable them to develop and achieve their goals, Connecting Startups has listed its top 50 startups.From the top 100 in the "Idea and Product Category', these 50 startups were selected out of which 10 will be finally selected in July.State Minister for ICT Division Junaid Ahmed Palak said, "I have personally seen all of the projects. I sincerely hope they get the recognition they deserve." The top 10 Startups will be given free dedicated office space and dedicated mentorship and accelerator support for one year, whereas the other top 40 Startups will be given provision to use the co-working Space. All these 40 Startups will enjoy 3 months worth accelerator support.
Encouraging news for startups
Bangladesh Bank (BB) offers a $500 million special fund for local large/medium-sized firms to get foreign currency loans at around 4% interest rate. The existing interest rates in the local banks are upward of 10%. This declaration will help the entrepreneurs in long term financing for eligible firms.This decision was taken after World Bank (WB) announced a $300 million fund for Bangladesh Bank to give loans to private companies (export-oriented garments, footwear industries, and leather manufacturing industries, and light engineering sectors). This new fund from Bangladesh Bank will expand long term financing option in Bangladesh. For instance, last year, only 30-35 of the 6000 eligible firms received dollar-based long-term financing.
Finally , to be success as startups the entrepreneurs need to have a good network, environment friendly venture capital along with individual capacity & dedication. We have the opportunity and the market to take challenge and meet it successfully. Positive awareness and community encouragement will also enhance the startups movement as a whole.
