Startups Receive Endorsement from FNCCI

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Startups Receive Endorsement from FNCCI

The Nepali startup ecosystem that had its seeds planted in 2008 is still in its infancy. There has been an increasing number of entrepreneurial activities in the last five years ushering in the growth of a vibrant community. As a Co-Founder of Nepal Entrepreneurs’ Hub that started conducting Techstars’ Startup Weekend and other events in 2013 to foster entrepreneurship, support startup communities and contribute towards a vibrant entrepreneurial ecosystem, I had been vocal about the lack of institutional involvement and support from the private sector and government apathy.

A startup is more than just another initiative of an entrepreneur. It is a culture that reflects the economic growth and latent potential of a nation. In a country where the definition of small and medium enterprises (SMEs) that make up 90 percent of entrepreneurial ventures is yet to be finalised, building a positive perception towards startups and the herculean task along the way can easily be assumed. In such an environment, the creation of a Startup and Innovation (S&I) Committee at the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) in April 2021 came as a big shot in the arm for the startup community.

Aligning with his ‘Vision Paper2030’ to expand the economy to USD 100 billion, Shekhar Golchha, the President of FNCCI is very upbeat. He says, “Encouraging startups is an important cog in the larger wheel to accelerate the economy. Though the failure rate is very high, the spirit of entrepreneurship must be encouraged. We are prepared to invest in selected startups to encourage the community and provide mentoring support to make the companies successful. In my term, this receives the highest priority among other pathbreaking initiatives. Though the second wave of Covid-19 has dented the efforts, it has not reduced the commitment and the zeal to make this successful”.

Suddenly, there has been traction all around. The draft of the Startup Policy 2017 prepared under the leadership of the former industry minister, late Nabindra Raj Joshi, and coordinated by Narottam Aryal, in which I was a committee member, was recognised. Fragmented efforts made by individuals and organizations in the past one and a half decade found a larger umbrella with a nationwide network to work with. I accepted the invitation to become the Co-Chair of the S&I Committee. An amplified voice of the S&I Committee has helped create a bridge in discussing with all the stakeholders and the government officials to create a conducive environment for entrepreneurs to thrive.

Ranjit Acharya, Chair of the S&I Committee has been busy. He says, “We are working with the government to define and create a policy for startups. We are confident, this policy will help create a positive environment for the growth of new entrepreneurs and startups. Our committee has also launched an exclusive program to help facilitate investments for startups through its investors' forum. Any registered startup, which is in operation for more than a year and has an audited balance sheet can apply by filling in the online form available in FNCCI web portal. We are here to help facilitate the startups and new and existing entrepreneurs with innovative business ideas in Nepal”.

The committee is comprised of well-known individuals and experts who are active in the startup ecosystem (https://www.fncci.org/start-up--innovation-286.html). The committee members are excited to be part of this unique initiative of the FNCCI as the apex body of the Nepali private sector works towards its vision of the National Economic Transformation (Rastriya Aarthik Rupantaran) 2030. Few subcommittees have been formed to manage different responsibilities. All have been looking forward to the requests for investments from startups who can apply at https://fncci.org/news/detail.php?i=2958. The application call remains open and anyone who fulfills the minimum criteria can apply.

Access to finance has been touted as one of the biggest bottlenecks to the growth of startups in Nepal. To ally the fears of constricted capital and its availability, the S&I Committee has managed to rope in 50 investors from FNCCI to pledge and to invest in 50 Startups. A bold initiative, the amount of investment will depend on the nature of the startups. It can range from Rs 5 million to Rs 50 million, or more. The applications will go through multiple screening processes and selected startups will be called to pitch their ideas. Till now, 79 applications have been received and 12 have reached the second stage.

The initial response demonstrates the capabilities of the startups as well as their inability to put required documents together and speak the language of the investors. Understanding these shortcomings, the S&I Committee has a panel of experts to mentor the companies. The panel includes Anil Chitrakar, Pashupati Murarka, Om Rajbhandary, Saurabh Jyoti, Ashutosh Tiwari, Ranjit Acharya, Siddhant Raj Pande, Bishwas Dhakal, Sumana Shrestha, Niraj Khanal, Ananda Bagaria, Gagan Pradhan, Niranjan Shrestha, Dileep Agrawal, Sanam Chitrakar, Yogendra Shakya, Bhaskar Dhungana and Sanjay Golchha and Suman Shakya.

If the 50 investor – 50 startup model works, it will provide a strong impetus to the government to model its Rs 1 billion fund, which is lying dormant for years, to support youth entrepreneurship. Siddhant Raj Pandey, co-chair of the S&I Committee opines, “Although we have been late in encouraging Startups in Nepal, the recent productive process taken forward by the government and by the private sector (especially FNCCI) is encouraging. There is a lot we can learn from our neighbors in South Asia, who are charging ahead to create new asset classes to fund start-ups. It is never too late and the realization that innovation through Startups is an unremitting path to progress is encouraging”.

Among other activities, the S&I Committee has been supporting NYEF (Nepal Young Entrepreneurs Forum) Startup Awards. It also organises the ‘First Friday Talk program’ bringing in successful entrepreneurs to share their secret sauce. Gagan Pradhan of Himalayan Java, who made coffee a popular beverage in Nepal among the upwardly mobile and Shaswat Dhakal of Big Mart, who has been expanding the footprint of the retail chain rapidly motivated the audience to believe in the process of entrepreneurship and success.

It is still early days. I can appreciate the rising expectation from the S&I Committee to deliver on its promises as it connects umbilically to the larger vision of the FNCCI leadership. The success parameters will reflect on the number of startups that weave through the application process and make a successful bid for investments. Ranjit Acharya shares the good news, “There will at least 2-3 startups receiving investment in the next couple of months”. The larger success will be when 50 Startups – 50 investors will trigger the formation of a unicorn from Nepal that will bring global entrepreneurship attention to Nepal, encourage more entrepreneurs, generate huge employment opportunities and contribute meaningfully to the economic growth of the country.

(Shakya is a consultant, certified trainer and entrepreneur. He can be reached at [email protected])

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