UCB to create Tk 700cr funds
United Business Bank (UCB) has made a decision to form two funds totalling Tk 700 crore to focus on an evergrowing demand for financing among promising local startups and e-commerce companies.
The UCB will invest Tk 100 crore to create a Tk 350 crore "UCB Venture Capital Fund-One" following approval from Bangladesh Bank and the Bangladesh Securities and Exchange Commission, reads a Dhaka Stock Exchange website post yesterday.
A little capital raising fund comes in the united states, despite which there's been a proliferation of startups in the last couple of years thanks to increased entrepreneurial enthusiasm among youths.
Bangladesh currently has a lot more than 1,200 active startups with above 200 new companies being born every year, according to a report by business consultancy organization LightCastle Partners.
Besides, prospective startups earned a lot more than $308 million from international capital raising funds within the last decade.
But nonetheless, funding for startups found in Bangladesh as a share of the country's GDP is drastically low, said LightCastle found in a good paper released last September.
"You want to quench the thirst for equity for innovative startups. We see many startups have innovative ideas however they are struggling for funding," said ATM Tahmiduzzaman, deputy handling director of the UCB.
"We think you will find a vacuum in this regard and funding from large institutions like the UCB will probably have a huge impact in accelerating the growth of startups and IT businesses," he added.
The deputy managing director went on to say that there were over 2,000 e-commerce entities active in the country.
The UCB's board also made a decision to form a Tk 350 crore private equity fund called "UCB Private Collateral Fund-One". The non-public bank plans to invest Tk 100 crore as a sponsor after getting the required approval.
"This alternative investment scheme is a virgin discipline too," said Tahmiduzzaman.
"So, we have to invest here to carry maximum progress for both investors and entrepreneurs and lastly donate to the national market," he added.
The board also decided to establish UCB Alternative Investments to ensure the smooth and successful operations of alternative investment funds such as for example capital raising, private equity and impact funds.
