Startups fear loss of Tk450 crore plus as damage from virus grows
Venture Capital and Private Equity Association of Bangladesh tables six proposals to the concerned ministries to save the startups
The startups in the country are at risk of collapse amid the coronavirus crisis, and some will probably not survive.
Nearly 300 startups fear a loss of more than Tk450 crore as sales of products and services have come to a screeching halt in the local market,Venture Capital and Private Equity Association of Bangladesh says.
Also,many startups have an export-oriented income which dramatically fell by at least 80 percent recently.The jobs ofalmost 1.5 lakh people– directly employed in these startups– are on the line now.
About 7 lakh service providers associated with these startups are currently not in a position to provide services either.
At this critical moment, Venture Capital and Private Equity Association of Bangladesh tabled six proposals to the concerned ministries on Wednesday to save the startups, said sources at the association.
"The Covid-19 pandemic is rocking the startup and venture capital ecosystem that we have built over the years, and withoutgovernment incentives and immediate action, it will collapse," the platform's Chairman Shameem Ahsan says.
The association wants the salaries of startup employees to be partly funded by a government grant for the next six months.
Also,office rent of the startups that are currently experiencing huge financial loss will have to be paid from the government grant during the same period, the platform suggested.
"Priority should be given to startups in government work and tenders so that they can stay afloat and their local market can be expanded," says the association.
As the government is making many classroom, education, health and entertainment related online content now, local startups should be involved in the process.
The platform also wants the government to offer collateral-free loans at a minimum interest of2 percent for its members and portfolio companies to help them meet their working capital requirement.
"Implementation of these proposals will ensure continuous revenue and cash flow for the startups," the association's General Secretary Shawkat Hossain said,"and their ventures can be saved from the existential threat posed by the ongoing crisis."
"When the situation becomes stable, venture capital and private equity firms will be able to raise funds from local and foreign investors to support the startups with financing or refinancing."
