Building a knowledge-driven economy is essential for Bangladesh’s future, with a supportive ecosystem crucial for the success of new ventures. Funding, particularly patient equity from venture capital (VC) firms, plays a pivotal role in fostering innovation, as traditional bank financing is ill-suited for such needs.
“Banks depend on the valuation of physical assets to secure their lending, which should not be the focus of businesses creating intellectual property (IP),” remarked Ashraf Ahmed, president of the Dhaka Chamber of Commerce & Industry (DCCI), during a recent focus group discussion on “Connecting Innovative SMEs and Startups with Private Equity & Venture Capital Firms for Bridging Financing Gap,” organised by DCCI.
Ahmed stressed the need for entrepreneurs to address challenges within existing regulatory frameworks, focusing on raising funds for innovation and expanding private equity (PE) and VC accessibility to small enterprises. Despite the growing demand and innovative activities, the matchmaking between PE and VC funds and entrepreneurs remains inadequate, he observed.
Professor Mohammad Abdul Momen, former director of the Institute of Business Administration (IBA) at the University of Dhaka, underscored the importance of a conducive policy environment to support the sector’s growth. "Many innovative startups are emerging, which is a positive indicator. We must nurture them from the outset to ensure sustainability for the broader economy," he stated, urging young innovators to patent their creations to secure their future contributions.
Industry representatives, including Mohammad Ashraf Hossain, Head of Compliance and Company Secretary at Maslin Capital Limited; Shawkat Hossain, CEO of Bangladesh Venture Capital Limited; Jasim Mohammad Miah, Investment Manager at X Angel Limited; and M M Ehsan Nizamee, CEO of Finager Fintech, also shared their perspectives.
Speakers pointed out significant hurdles in accessing finance, such as asset valuation challenges, shortages of qualified personnel, and the need for secure investment structures. For tech companies, the difficulty lies in auditing intellectual assets, which complicates valuation and global financing efforts. They emphasised the necessity of making startups attractive to global investors, fostering policy reforms, and establishing logical exit plans for startups.
“There’s a lack of qualified talent in this market,” one entrepreneur noted, stressing the need to focus on fund-raising from international sources, improving valuation methods, and reforming policies to support innovation.
The event drew eight representatives from PE and VC firms, alongside 14 startup companies and 26 SMEs. Members of the DCCI Board of Directors were also in attendance.
